Z-1405               _______________________________________________

 

                                                   HOUSE BILL NO. 1591

                        _______________________________________________

 

State of Washington                              49th Legislature                              1986 Regular Session

 

By Representatives Wang, Sayan and Fisch; by request of Employment Security Department

 

 

Read first time 1/20/86 and referred to Committee on Commerce & Labor.

 

 


AN ACT Relating to corporate bonding requirements for unemployment compensation; adding a new section to chapter 50.24 RCW; and creating a new section.

 

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

 

          NEW SECTION.  Sec. 1.  A new section is added to chapter 50.24 RCW to read as follows:

          In the discretion of the commissioner, any corporation that is an employer as defined in RCW 50.04.080 is required within thirty days after becoming an employer to execute and file with the commissioner a surety bond approved by the commissioner or it may elect instead to deposit with the commissioner money or securities.  The amount of the bond or deposit shall be determined in accordance with this section.

          (1) The amount of the bond or deposit required by this subsection shall be an amount deemed by the commissioner to be sufficient to cover any contributions that may be required from the employer attributable to employment during any year.  The determination made pursuant to this subsection shall be based on payroll information, employment experience, and such other factors as the commissioner deems pertinent.

          (2) Any bond deposited under this section shall be in force for a period of not less than two taxable years and shall be renewed with the approval of the commissioner, at such times as the commissioner may prescribe, but not less frequently than at two-year intervals as long as the corporation continues to be liable for  contributions.  The commissioner shall require adjustments to be made in a previously filed bond as the commissioner deems appropriate.  If the bond is to be increased, the adjusted bond shall be filed by the corporation within thirty days of the date notice of the required adjustment was mailed or otherwise delivered to it.  Failure by any corporation covered by the bond to pay the full amount of contributions when due, together with any applicable interest and penalties provided for in this title, shall render the surety liable on the bond to the extent of the bond, as though the surety was the corporation.

          (3) Any deposit of money or securities in accordance with this section shall be retained by the commissioner in an escrow account until liability is terminated, at which time it shall be returned to the corporation, less any deductions as provided in this subsection.  The commissioner may deduct from the money deposited under this section by a corporation or sell the securities it has so deposited to the extent necessary to satisfy any due and unpaid  contributions and any applicable interest and penalties provided for in this title.  The commissioner shall require the corporation within thirty days following any deduction from a money deposit or sale of deposited securities under this subsection to deposit sufficient additional money or securities to make whole the corporation's deposit at the prior level.  Any cash remaining from the sale of the securities shall be a part of the organization's escrow account.  The commissioner may at any time review the adequacy of the deposit made by any corporation.  If, as a result of the review, the commissioner determines that an adjustment is necessary, the commissioner shall require the corporation to make an additional deposit within thirty days of written notice of the determination or shall return to it such portion of the deposit as the commissioner no longer considers necessary, whichever action is appropriate.  Disposition of income from securities held in escrow shall be governed by the applicable provisions of the state law.

 

          NEW SECTION.  Sec. 2.     If any part of this act is found to be in conflict with federal requirements which are a prescribed condition to the allocation of federal funds to the state or the eligibility of employers in this state for federal unemployment tax credits, the conflicting part of this act is hereby declared to be inoperative solely to the extent of the conflict, and such finding or determination shall not affect the operation of the remainder of this act.  The rules under this act shall meet federal requirements which are a necessary condition to the receipt of federal funds by the state or the granting of federal unemployment tax credits to employers in this state.

 

          NEW SECTION.  Sec. 3.     If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.