BILL REQ. #:  H-3837.1 

Read first time 01/25/12.   Referred to Committee on Judiciary.

     AN ACT Relating to improving child support collections by requiring reporting of compensation and establishing an intercept program; adding new sections to chapter 26.23 RCW; creating a new section; and prescribing penalties.

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

NEW SECTION.  Sec. 1   The legislature recognizes that the state has an interest in ensuring that children are supported by their parents. It benefits the children and the state for the state to have an effective child support enforcement program. Therefore, the legislature intends to create new tools to increase the collection of child support obligations.

NEW SECTION.  Sec. 2   A new section is added to chapter 26.23 RCW to read as follows:
     (1) Any person or entity doing business in the state of Washington who is required to file a report with the internal revenue service for services received from an independent contractor shall report to the Washington state support registry the hiring of any independent contractor who resides or works in this state to whom the person or entity anticipates paying compensation.
     (2) Persons or entities may report by any means authorized by the registry which will result in timely reporting. The following information must be reported:
     (a) The independent contractor's name, address, social security number, and date of birth; and
     (b) The person or entity's name, address, and, if applicable, the identifying number assigned under section 6109 of the internal revenue code of 1986.
     (3) Persons or entities shall submit reports within twenty days of either entering into a contract with the independent contractor for compensation of six hundred dollars or more or making payments to the independent contractor totaling six hundred dollars or more.
     (4) A person or entity who fails to report as required under this section is subject to a civil penalty of:
     (a) Twenty-five dollars; or
     (b) Five hundred dollars, if the failure to report is the result of a conspiracy between the person or entity and the independent contractor not to supply the required report, or to supply a false report. The penalty may be imposed and collected by the division of child support under RCW 74.20A.350.
     (5)(a) The registry must retain the information for a particular independent contractor only if the registry is responsible for establishing, enforcing, or collecting a support debt of the independent contractor. The registry may, however, retain information for a particular independent contractor for as long as may be necessary to:
     (i) Transmit the information to the national directory of new hires as required under federal law; or
     (ii) Provide the information to other state agencies for comparison with records or information possessed by those agencies as required by law.
     (b) Information that is not permitted to be retained must be promptly destroyed. Agencies that obtain information from the department of social and health services under this section shall maintain the confidentiality of the information received, except as necessary to implement the agencies' responsibilities.
     (6) For the purposes of this section, "independent contractor" means an individual who:
     (a) Is customarily engaged in an independently established trade, occupation, profession, or business, of the same nature as that involved in the contract of service, or the individual has a principal place of business for the business the individual is conducting that is eligible for a business deduction for federal income tax purposes; and
     (b) On the effective date of the contract of service, is responsible for filing at the next applicable filing period, both under the contract of service and in fact, a schedule of expenses with the internal revenue service for the type of business the individual is conducting; and
     (c) On the effective date of the contract of service, or within a reasonable period after the effective date of the contract, has established an account with the department of revenue, and other state agencies as required by the particular case, for the business the individual is conducting for the payment of all state taxes normally paid by employers and businesses and has registered for and received a unified business identifier number from the state of Washington; and
     (d) On the effective date of the contract of service, is maintaining a separate set of books or records that reflect all items of income and expenses of the business which the individual is conducting.

NEW SECTION.  Sec. 3   A new section is added to chapter 26.23 RCW to read as follows:
     (1) The department shall develop rules to implement a gambling payment intercept program. The gambling payment intercept program must require cardrooms and casinos to withhold cash payments from a winning player if the player is a parent with a child support obligation in arrears. The department shall develop a process for the cardrooms and casinos to search a database or list of obligor parents in arrears provided to the cardroom and casino by the department and report to the department.
     (2) The department shall work with the Washington state gambling commission to make every effort to negotiate tribal gaming compacts with the tribes that include gambling payment intercept programs.