AN ACT Relating to industrial insurance; amending RCW 49.17.030, 51.04.110, 51.08.173, 51.12.070, 51.12.100, 51.12.120, 51.16.060, 51.16.140, 51.41.100, and 51.44.040; creating new sections; and repealing RCW 51.14.010, 51.14.020, 51.14.030, 51.14.040, 51.14.050, 51.14.060, 51.14.070, 51.14.080, 51.14.090, 51.14.100, 51.14.110, 51.14.150, 51.14.160, 28A.21.255, and 28A.58.410.

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

Sec. 1. Section 3, chapter 80, Laws of 1973 and RCW 49.17.030 are each amended to read as follows:

This chapter shall apply with respect to employment performed in any work place within the state. The department of labor and industries shall provide by rule for a schedule of fees and charges to be paid by each employer subject to this chapter who is not subject to or obtaining coverage under the industrial insurance laws ((~~and who is not a self-insurer~~)). The fees and charges collected shall be for the purpose of defraying such employer's pro rata share of the expenses of enforcing and administering this chapter.

Sec. 2. Section 3, chapter 14, Laws of 1980 as amended by section 2, chapter 109, Laws of 1982 and RCW 51.04.110 are each amended to read as follows:

The director shall appoint a workers' compensation advisory committee composed of ten members: ((~~Three~~)) Four representing subject workers, ((~~three~~)) four representing subject employers, ((~~one representing self-insurers, one representing workers of self-insurers,~~)) and two ex officio members, without a vote, one of whom shall be the chairman of the board of industrial appeals and the other the representative of the department. The member representing the department shall be chairman. This committee shall conduct a continuing study of any aspects of workers' compensation as the committee shall determine require their consideration. The committee shall report its findings to the department or the board of industrial insurance appeals for such action as deemed appropriate. The members of the committee shall be appointed for a term of three years commencing on July 1, 1971 and the terms of the members representing the workers and employers shall be staggered so that the director shall designate one member from each such group initially appointed whose term shall expire on June 30, 1972 and one member from each such group whose term shall expire on June 30, 1973. The members shall serve without compensation, but shall be entitled to travel expenses as provided in RCW 43.03.050 and 43.03.060 as now existing or hereafter amended. The committee may hire such experts, if any, as it shall require to discharge its duties, and may utilize such personnel and facilities of the department and board of industrial insurance appeals as it shall need without charge. All expenses of this committee shall be paid by the department.

Sec. 3. Section 80, chapter 289, Laws of 1971 ex. sess. as amended by section 1, chapter 174, Laws of 1983 and RCW 51.08.173 are each amended to read as follows:

"Self-insurer" means an employer ((~~or group of employers which has been authorized under this title to carry~~)) who carried its own liability to its employees ((~~covered by this title~~)) as authorized under this title before the effective date of this 1985 act.

Sec. 4. Section 51.12.070, chapter 23, Laws of 1961 as last amended by section 4, chapter 128, Laws of 1981 and RCW 51.12.070 are each amended to read as follows:

The provisions of this title shall apply to all work done by contract; the person, firm, or corporation who lets a contract for such work shall be responsible primarily and directly for all premiums upon the work. The contractor and any subcontractor shall be subject to the provisions of this title and the person, firm, or corporation letting the contract shall be entitled to collect from the contractor the full amount payable in premiums and the contractor in turn shall be entitled to collect from the subcontractor his proportionate amount of the payment.

For the purposes of this section, a contractor registered under chapter 18.27 RCW or licensed under chapter 19.28 RCW shall not be responsible for any premiums upon the work of any subcontractor if:

(1) The subcontractor is currently engaging in a business which is registered under chapter 18.27 RCW or licensed under chapter 19.28 RCW;

(2) The subcontractor has a principal place of business which would be eligible for a business deduction for internal revenue service tax purposes other than that furnished by the contractor for which the business has contracted to furnish services;

(3) The subcontractor maintains a separate set of books or records that reflect all items of income and expenses of the business; and

(4) The subcontractor has contracted to perform:

(a) The work of a contractor as defined in RCW 18.27.010; or

(b) The work of installing wires or equipment to convey electric current or installing apparatus to be operated by such current as it pertains to the electrical industry as described in chapter 19.28 RCW.

It shall be unlawful for any county, city or town to issue a construction building permit to any person who has not submitted to the department an estimate of payroll and paid premium thereon as provided by chapter 51.16 RCW of this title ((~~or proof that such person has qualified as a self-insurer~~)).

Sec. 5. Section 51.12.100, chapter 23, Laws of 1961 as last amended by section 21, chapter 350, Laws of 1977 ex. sess. and RCW 51.12.100 are each amended to read as follows:

The provisions of this title shall not apply to a master or member of a crew of any vessel, or to employers and workers for whom a right or obligation exists under the maritime laws for personal injuries or death of such workers.

If an accurate segregation of payrolls of workers for whom such a right or obligation exists under the maritime laws cannot be made by the employer, the director is hereby authorized and directed to fix from time to time a basis for the approximate segregation of the payrolls of employees to cover the part of their work for which no right or obligation exists under the maritime laws for injuries or death occurring in such work, and the employer((~~, if not a self-insurer,~~)) shall pay premiums on that basis for the time such workers are engaged in their work.

Where two or more employers are simultaneously engaged in a common enterprise at one and the same site or place in maritime occupations under circumstances in which no right or obligation exists under the maritime laws for personal injuries or death of such workers, such site or place shall be deemed for the purposes of this title to be the common plant of such employers.

In the event payments are made under this title prior to the final determination under the maritime laws, such benefits shall be repaid if recovery is subsequently made under the maritime laws.

Sec. 6. Section 82, chapter 289, Laws of 1971 ex. sess. as last amended by section 23, chapter 350, Laws of 1977 ex. sess. and RCW 51.12.120 are each amended to read as follows:

(1) If a worker, while working outside the territorial limits of this state, suffers an injury on account of which he or she, or his or her beneficiaries, would have been entitled to compensation under this title had such injury occurred within this state, such worker, or his or her beneficiaries, shall be entitled to compensation under this title: PROVIDED, That if at the time of such injury:

(a) His or her employment is principally localized in this state; or

(b) He or she is working under a contract of hire made in this state for employment not principally localized in any state; or

(c) He or she is working under a contract of hire made in this state for employment principally localized in another state whose workers' compensation law is not applicable to his or her employer; or

(d) He or she is working under a contract of hire made in this state for employment outside the United States and Canada.

(2) The payment or award of compensation under the workers' compensation law of another state, territory, province, or foreign nation to a worker or his or her beneficiaries otherwise entitled on account of such injury to compensation under this title shall not be a bar to a claim for compensation under this title: PROVIDED, That claim under this title is timely filed. If compensation is paid or awarded under this title, the total amount of compensation paid or awarded the worker or beneficiary under such other workers' compensation law shall be credited against the compensation due the worker or beneficiary under this title.

(3) If a worker or beneficiary is entitled to compensation under this title by reason of an injury sustained in this state while in the employ of an employer who is domiciled in another state and who has neither opened an account with the department nor qualified as a self-insurer under this title, such an employer or his or her insurance carrier shall file with the director a certificate issued by the agency which administers the workers' compensation law in the state of the employer's domicile, certifying that such employer has secured the payment of compensation under the workers' compensation law of such other state and that with respect to said injury such worker or beneficiary is entitled to the benefits provided under such law. In such event:

(a) The filing of such certificate shall constitute appointment by the employer or his or her insurance carrier of the director as its agent for acceptance of the service of process in any proceeding brought by any claimant to enforce rights under this title;

(b) The director shall send to such employer or his or her insurance carrier, by registered or certified mail to the address shown on such certificate, a true copy of any notice of claim or other process served on the director by the claimant in any proceeding brought to enforce rights under this title;

(c) (((i) If such employer is a self-insurer under the workers' compensation law of such other state, such employer shall, upon submission of evidence or security, satisfactory to the director, of his or her ability to meet his or her liability to such claimant under this title, be deemed to be a qualified self-insurer under this title;

~~(ii)~~)) If such employer's liability under the workers' compensation law of such other state is insured, such employer's carrier, as to such claimant only, shall be deemed to be subject to this title: PROVIDED, That unless its contract with said employer requires it to pay an amount equivalent to the compensation benefits provided by this title, the insurer's liability for compensation shall not exceed its liability under the workers' compensation law of such other state;

(d) If the total amount for which such employer's insurer is liable under (c)((~~(ii)~~)) above is less than the total of the compensation to which such claimant is entitled under this title, the director may require the employer to file security satisfactory to the director to secure the payment of compensation under this title; and

(e) If such employer has ((~~neither qualified as a self-insurer nor~~)) not secured insurance coverage under the workers' compensation law of another state, such claimant shall be paid compensation by the department;

(f) Any such employer shall have the same rights and obligations as other employers subject to this title and where he or she has not provided coverage or sufficient coverage to secure the compensation provided by this title to such claimant, the director may impose a penalty payable to the department of a sum not to exceed fifty percent of the cost to the department of any deficiency between the compensation provided by this title and that afforded such claimant by such employer or his or her insurance carrier if any.

(4) As used in this section:

(a) A person's employment is principally localized in this or another state when (i) his or her employer has a place of business in this or such other state and he or she regularly works at or from such place of business, or (ii) if clause (i) foregoing is not applicable, he or she is domiciled in and spends a substantial part of his or her working time in the service of his or her employer in this or such other state;

(b) "Workers' compensation law" includes "occupational disease law" for the purposes of this section.

(5) A worker whose duties require him or her to travel regularly in the service of his or her employer in this and one or more other states may agree in writing with his or her employer that his or her employment is principally localized in this or another state, and, unless such other state refuses jurisdiction, such agreement shall govern as to any injury occurring after the effective date of the agreement.

(6) The director shall be authorized to enter into agreements with the appropriate agencies of other states and provinces of Canada which administer their workers' compensation law with respect to conflicts of jurisdiction and the assumption of jurisdiction in cases where the contract of employment arises in one state or province and the injury occurs in another, and when any such agreement has been executed and promulgated as a regulation of the department under chapter 34.04 RCW, it shall bind all employers and workers subject to this title and the jurisdiction of this title shall be governed by this regulation.

Sec. 7. Section 13, chapter 260, Laws of 1981 and RCW 51.16.060 are each amended to read as follows:

Every employer ((~~not qualifying as a self-insurer,~~)) shall insure with the state and shall, on or before the last day of January, April, July and October of each year thereafter, furnish the department with a true and accurate payroll for the period in which workers were employed by it during the preceding calendar quarter, the total amount paid to such workers during such preceding calendar quarter, and a segregation of employment in the different classes established pursuant to this title, and shall pay its premium thereon to the appropriate fund. The sufficiency of such statement shall be subject to the approval of the director: PROVIDED, That the director may in his or her discretion and for the effective administration of this title require an employer in individual instances to furnish a supplementary report containing the name of each individual worker, his or her hours worked, his or her rate of pay and the class or classes in which such work was performed: PROVIDED FURTHER, That in the event an employer shall furnish the department with four consecutive quarterly reports wherein each such quarterly report indicates that no premium is due the department may close the account: PROVIDED FURTHER, That the department may promulgate rules and regulations in accordance with chapter 34.04 RCW to establish other reporting periods and payment due dates in lieu of reports and payments following each calendar quarter, and may also establish terms and conditions for payment of premiums and assessments based on estimated payrolls, with such payments being subject to approval as to sufficiency of the estimated payroll by the department, and also subject to appropriate periodic adjustments made by the department based on actual payroll: AND PROVIDED FURTHER, That a temporary help company which provides workers on a temporary basis to its customers shall be considered the employer for purposes of reporting and paying premiums and assessments under this title according to the appropriate rate classifications as determined by the department: PROVIDED, That the employer shall be liable for paying premiums and assessments, should the temporary help company fail to pay the premiums and assessments under this title.

Sec. 8. Section 51.16.140, chapter 23, Laws of 1961 as last amended by section 29, chapter 350, Laws of 1977 ex. sess. and RCW 51.16.140 are each amended to read as follows:

Every employer ((~~who is not a self-insurer~~)) shall deduct from the pay of each of his or her workers one-half of the amount he or she is required to pay, for medical benefits within each risk classification. Such amount shall be periodically determined by the director and reported by him or her to all employers under this title: PROVIDED, That the state governmental unit shall pay the entire amount into the medical aid fund for volunteers, as defined in RCW 51.12.035, and the state apprenticeship council shall pay the entire amount into the medical aid fund for registered apprentices or trainees, for the purposes of RCW 51.12.130. It shall be unlawful for the employer, unless specifically authorized by this title, to deduct or obtain any part of the premium or other costs required to be by him or her paid from the wages or earnings of any of his or her workers, and the making of or attempt to make any such deduction shall be a gross misdemeanor.

Sec. 9. Section 7, chapter 63, Laws of 1982 and RCW 51.41.100 are each amended to read as follows:

On or before January 1st of each year, the office of financial management shall submit to the legislature a rehabilitation performance audit of the activities of the office of rehabilitation review, the industrial insurance division, ((~~self-insurers,~~)) and private rehabilitation agencies. The performance audit shall include a statistical summary of all rehabilitation cases, a cost-benefit analysis of vocational rehabilitation plans, return-to-work data, and a comparison of public and private vocational rehabilitation services. The office of financial management may contract with a private firm to conduct the performance audit.

Sec. 10. Section 51.44.040, chapter 23, Laws of 1961 as last amended by section 14, chapter 63, Laws of 1982 and RCW 51.44.040 are each amended by read as follows:

(1) There shall be in the office of the state treasurer, a fund to be known and designated as the "second injury fund", which shall be used only for the purpose of defraying charges against it as provided in RCW 51.16.120 and 51.32.250, as now or hereafter amended. Said fund shall be administered by the director. The state treasurer shall be the custodian of the second injury fund and shall be authorized to disburse moneys from it only upon written order of the director.

(2) Payments to the second injury fund from the accident fund shall be made pursuant to rules and regulations promulgated by the director.

(((3) Assessments for the second injury fund shall be imposed on self-insurers pursuant to rules and regulations promulgated by the director to ensure that self-insurers shall pay to such fund in the proportion that the payments made from such fund on account of claims made against self-insurers bears to the total sum of payments from such fund.))

NEW SECTION. Sec. 11. The following acts or parts of acts are each repealed:

(1) Section 26, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.010;

(2) Section 27, chapter 289, Laws of 1971 ex. sess., section 16, chapter 43, Laws of 1972 ex. sess., section 9, chapter 323, Laws of 1977 ex. sess. and RCW 51.14.020;

(3) Section 28, chapter 289, Laws of 1971 ex. sess., section 10, chapter 323, Laws of 1977 ex. sess. and RCW 51.14.030;

(4) Section 29, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.040;

(5) Section 30, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.050;

(6) Section 31, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.060;

(7) Section 36, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.070;

(8) Section 32, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.080;

(9) Section 33, chapter 289, Laws of 1971 ex. sess., section 1, chapter 21, Laws of 1983 and RCW 51.14.090;

(10) Section 34, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.100;

(11) Section 35, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.110;

(12) Section 7, chapter 191, Laws of 1982, section 2, chapter 174, Laws of 1983 and RCW 51.14.150;

(13) Section 8, chapter 191, Laws of 1982, section 3, chapter 174, Laws of 1983 and RCW 51.14.160;

(14) Section 9, chapter 191, Laws of 1982 and RCW 28A.21.255; and

(15) Section 10, chapter 191, Laws of 1982 and RCW 28A.58.410.

NEW SECTION. Sec. 12. (1) This act does not affect the rights of any employee of a self-insurer injured before the effective date of this act.

(2) Nothing in this act may be construed to affect any existing rights acquired or any existing liabilities or obligations incurred under the sections amended or repealed in this act, nor as affecting any civil or criminal proceedings instituted under those sections, nor any rule or regulation adopted thereunder, nor any administrative action taken thereunder.

NEW SECTION. Sec. 13. This act shall be effective for industrial injuries occurring on or after the effective date of this act.