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                                                   SENATE BILL NO. 5010

                        _______________________________________________

State of Washington                              49th Legislature                              1986 Regular Session

By Senators Newhouse and Vognild

Read first time 1/24/86 and referred to Committee on Commerce & Labor.

AN ACT Relating to the federal interest payment fund; amending RCW 50.16.070; creating a new section; providing an effective date; and declaring an emergency.

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

        Sec. 1.  Section 7, chapter 13, Laws of 1983 1st ex. sess. and RCW 50.16.070 are each amended to read as follows:

          The federal interest payment fund shall consist of contributions payable by each employer (except employers as described in  RCW 50.44.010 and 50.44.030 who have properly elected to make payments in lieu of contributions, employers who are required to make payments in lieu of contributions, and employers paying contributions under RCW 50.44.035) for any calendar quarter ((which begins on or after January 1, 1984, and)) for which the commissioner determines that the department will have an outstanding balance of accruing federal interest at the end of the calendar quarter.  The amount of wages subject to tax shall be determined according to RCW 50.24.010.  The tax rate applicable to wages paid during the calendar quarter shall be determined by the commissioner and shall not exceed fifteen one-hundredths of one percent.  In determining whether to require contributions as authorized by this section, the commissioner shall consider the current balance in the federal interest payment fund and the projected amount of interest which will be due and payable as of the following September 30.  Any excess moneys in the federal interest payment fund shall be retained in the fund for future interest payments: PROVIDED, That all moneys in the fund as of March 31, 1986, including any interest thereon, shall be distributed according to the following:

(1) The administrative costs involved in the distribution of moneys in the fund as of March 31, 1986, and in the issuance of employer credits in subsection (3) of this section shall be reimbursed from the amount of interest that has accrued to the fund as of that date.

(2) The amount of moneys remaining in the fund after the reimbursement of administrative costs under subsection (1) of this section shall be transferred to the state's account in the unemployment trust fund in the United States treasury.

(3) Each employer who made contributions to the federal interest payment fund shall receive a credit which may be applied against contributions due pursuant to chapter 50.24 RCW for rate year 1986.  The credit shall be an amount equal to the contributions made to the federal interest payment fund.

          Contributions under this section shall become due and be paid by each employer in accordance with such rules as the commissioner may prescribe and shall not be deducted, in whole or in part, from the remuneration of individuals in the employ of the employer.  Any deduction in violation of this section is unlawful.

          In the payment of any contributions under this section, a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to one cent.

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.

NEW SECTION. Sec. 4.     This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and shall take effect March 31, 1986.