H-0830.1  _______________________________________________

                          HOUSE BILL 1196

          _______________________________________________

State of Washington      54th Legislature     1995 Regular Session

By Representatives Lisk, Thompson, Blanton, Honeyford and Van Luven

Read first time 01/17/95.  Referred to Committee on Commerce & Labor.

Revising the unemployment insurance tax schedules.

    AN ACT Relating to revising the unemployment insurance tax schedules by establishing the tax schedule for 1995 and by modifying the fund balance ratio intervals used to determine the effective tax schedule; reenacting and amending RCW 50.29.025 and 50.29.025; providing an effective date; providing an expiration date; and declaring an emergency.

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

    Sec. 1.  RCW 50.29.025 and 1993 c 483 s 21 and 1993 c 226 s 13 are each reenacted and amended to read as follows:

    The contribution rate for each employer shall be determined under this section.

    (1) A fund balance ratio shall be determined by dividing the balance in the unemployment compensation fund as of the June 30th immediately preceding the rate year by the total remuneration paid by all employers subject to contributions during the second calendar year preceding the rate year and reported to the department by the following March 31st.  The division shall be carried to the fourth decimal place with the remaining fraction, if any, disregarded.  The fund balance ratio shall be expressed as a percentage.

    (2) The interval of the fund balance ratio, expressed as a percentage, shall determine which tax schedule in subsection (5) of this section shall be in effect for assigning tax rates for the rate year except that during rate year 1995 tax schedule AA shall be in effect.  The intervals for determining the effective tax schedule shall be:

           Interval of the

           Fund Balance Ratio                             Effective 

           Expressed as a Percentage                   Tax Schedule

           ((3.90)) 2.90 and above                               AA    

           ((3.40 to 3.89)) 2.50 to 2.89                          A    

           ((2.90 to 3.39)) 2.10 to 2.49                          B    

           ((2.40 to 2.89)) 1.60 to 2.09                          C    

           ((1.90 to 2.39)) 1.10 to 1.59                          D    

           ((1.40 to 1.89)) 0.60 to 1.09                          E    

           Less than ((1.40)) 0.60                                F    

    (3) An array shall be prepared, listing all qualified employers in ascending order of their benefit ratios.  The array shall show for each qualified employer:  (a) Identification number; (b) benefit ratio; (c) taxable payrolls for the four calendar quarters immediately preceding the computation date and reported to the department by the cut-off date; (d) a cumulative total of taxable payrolls consisting of the employer's taxable payroll plus the taxable payrolls of all other employers preceding him or her in the array; and (e) the percentage equivalent of the cumulative total of taxable payrolls.

    (4) Each employer in the array shall be assigned to one of twenty rate classes according to the percentage intervals of cumulative taxable payrolls set forth in subsection (5) of this section:  PROVIDED, That if an employer's taxable payroll falls within two or more rate classes, the employer and any other employer with the same benefit ratio shall be assigned to the lowest rate class which includes any portion of the employer's taxable payroll.

    (5) The contribution rate for each employer in the array shall be the rate specified in the following table for the rate class to which he or she has been assigned, as determined under subsection (4) of this section, within the tax schedule which is to be in effect during the rate year:

   Percent of

   Cumulative     Schedule of Contribution Rates

Taxable Payrolls  for Effective Tax Schedule

            ((Rate

  From To  Class     AA  A      B      C      D      E  F

0.00 5.00 1    0.48 0.36 0.46   0.86   1.36   1.76   2.36

5.01 10.00 2    0.48 0.36 0.66   1.06   1.56   1.96   2.56

10.01 15.00 3    0.58 0.46 0.86   1.26   1.66   2.16   2.76

15.01 20.00 4    0.58 0.66 1.06   1.46   1.86   2.36   2.96

20.01 25.00 5    0.78 0.86 1.26   1.66   2.06   2.56   3.06

25.01 30.00 6    0.98 1.06 1.46   1.86   2.26   2.66   3.16

30.01 35.00 7    1.08 1.26 1.66   2.06   2.46   2.86   3.26

35.01 40.00 8    1.28 1.46 1.86   2.26   2.66   3.06   3.46

40.01 45.00 9    1.48 1.66 2.06   2.46   2.86   3.26   3.66

45.01 50.00 10    1.68 1.86 2.26   2.66   3.06   3.46   3.86

50.01 55.00 11    1.98 2.16 2.46   2.86   3.26   3.66   3.96

55.01 60.00 12    2.18 2.36 2.66   3.06   3.46   3.86   4.16

60.01 65.00 13    2.38 2.56 2.86   3.26   3.66   4.06   4.36

65.01 70.00 14    2.58 2.76 3.06   3.46   3.86   4.26   4.56

70.01 75.00 15    2.88 2.96 3.26   3.66   4.06   4.46   4.66

75.01 80.00 16    3.08 3.16 3.46   3.86   4.26   4.56   4.76

80.01 85.00 17    3.28 3.36 3.66   4.06   4.46   4.76   4.86

85.01 90.00 18    3.68 3.76 4.06   4.46   4.76   4.86   5.06

90.01 95.00 19    4.08 4.16 4.46   4.86   4.96   5.06   5.26

95.01 100.00 20   5.40 5.40 5.40   5.40   5.40   5.40 5.40))

Rate

From To Class AA A B C D E F

 0.00 5.00 1 0.36 0.36 0.46 0.86 1.36 1.76 2.36

 5.01 10.00 2 0.36 0.36 0.66 1.06 1.56 1.96 2.56

 10.01 15.00 3 0.46 0.46 0.86 1.26 1.66 2.16 2.76

 15.01 20.00 4 0.46 0.66 1.06 1.46 1.86 2.36 2.96

20.01 25.00 5 0.66 0.86 1.26 1.66 2.06 2.56 3.06

25.01 30.00 6 0.86 1.06 1.46 1.86 2.26 2.66 3.16

30.01 35.00 7 0.96 1.26 1.66 2.06 2.46 2.86 3.26

35.01 40.00 8 1.16 1.46 1.86 2.26 2.66 3.06 3.46

40.01 45.00 9 1.36 1.66 2.06 2.46 2.86 3.26 3.66

45.01 50.00 10 1.56 1.86 2.26 2.66 3.06 3.46 3.86

50.01 55.00 11 1.86 2.16 2.46 2.86 3.26 3.66 3.96

55.01 60.00 12 2.06 2.36 2.66 3.06 3.46 3.86 4.16

60.01 65.00 13 2.26 2.56 2.86 3.26 3.66 4.06 4.36

65.01 70.00 14 2.46 2.76 3.06 3.46 3.86 4.26 4.56

70.01 75.00 15 2.76 2.96 3.26 3.66 4.06 4.46 4.66

75.01 80.00 16 2.96 3.16 3.46 3.86 4.26 4.56 4.76

80.01 85.00 17 3.16 3.36 3.66 4.06 4.46 4.76 4.86

85.01 90.00 18 3.56 3.76 4.06 4.46 4.76 4.86 5.06

90.01 95.00 19 3.96 4.16 4.46 4.86 4.96 5.06 5.26

95.01 100.00 20 5.40 5.40 5.40 5.40 5.40 5.40 5.40

    (6) The contribution rate for each employer not qualified to be in the array shall be as follows:

    (a) Employers who do not meet the definition of "qualified employer" by reason of failure to pay contributions when due shall be assigned the contribution rate of five and six-tenths percent, except employers who have an approved agency-deferred payment contract by September 30 of the previous rate year.  If any employer with an approved agency-deferred payment contract fails to make any one of the succeeding deferred payments or fails to submit any succeeding tax report and payment in a timely manner, the employer's tax rate shall immediately revert to five and six-tenths percent for the current rate year;

    (b) The contribution rate for employers exempt as of December 31, 1989, who are newly covered under the section 78, chapter 380, Laws of 1989 amendment to RCW 50.04.150 and not yet qualified to be in the array shall be 2.5 percent for employers whose standard industrial code is "013", "016", "017", "018", "019", "021", or "081"; and

    (c) For all other employers not qualified to be in the array, the contribution rate shall be a rate equal to the average industry rate as determined by the commissioner; however, the rate may not be less than one percent.  Assignment of employers by the commissioner to industrial classification, for purposes of this subsection, shall be in accordance with established classification practices found in the "Standard Industrial Classification Manual" issued by the federal office of management and budget to the third digit provided in the Standard Industrial Classification code.

    Sec. 2.  RCW 50.29.025 and 1993 c 483 s 21 and 1993 c 226 s 14 are each reenacted and amended to read as follows:

    The contribution rate for each employer shall be determined under this section.

    (1) A fund balance ratio shall be determined by dividing the balance in the unemployment compensation fund as of the June 30th immediately preceding the rate year by the total remuneration paid by all employers subject to contributions during the second calendar year preceding the rate year and reported to the department by the following March 31st.  The division shall be carried to the fourth decimal place with the remaining fraction, if any, disregarded.  The fund balance ratio shall be expressed as a percentage.

    (2) The interval of the fund balance ratio, expressed as a percentage, shall determine which tax schedule in subsection (5) of this section shall be in effect for assigning tax rates for the rate year.  The intervals for determining the effective tax schedule shall be:

           Interval of the

           Fund Balance Ratio                             Effective 

           Expressed as a Percentage                   Tax Schedule

           ((3.90)) 2.90 and above                               AA    

           ((3.40 to 3.89)) 2.50 to 2.89                          A    

           ((2.90 to 3.39)) 2.10 to 2.49                          B    

           ((2.40 to 2.89)) 1.60 to 2.09                          C    

           ((1.90 to 2.39)) 1.10 to 1.59                          D    

           ((1.40 to 1.89)) 0.60 to 1.09                          E    

           Less than ((1.40)) 0.60                                F    

    (3) An array shall be prepared, listing all qualified employers in ascending order of their benefit ratios.  The array shall show for each qualified employer:  (a) Identification number; (b) benefit ratio; (c) taxable payrolls for the four calendar quarters immediately preceding the computation date and reported to the department by the cut-off date; (d) a cumulative total of taxable payrolls consisting of the employer's taxable payroll plus the taxable payrolls of all other employers preceding him or her in the array; and (e) the percentage equivalent of the cumulative total of taxable payrolls.

    (4) Each employer in the array shall be assigned to one of twenty rate classes according to the percentage intervals of cumulative taxable payrolls set forth in subsection (5) of this section:  PROVIDED, That if an employer's taxable payroll falls within two or more rate classes, the employer and any other employer with the same benefit ratio shall be assigned to the lowest rate class which includes any portion of the employer's taxable payroll.

    (5) The contribution rate for each employer in the array shall be the rate specified in the following tables for the rate class to which he or she has been assigned, as determined under subsection (4) of this section, within the tax schedule which is to be in effect during the rate year:

      Percent of

   Cumulative     Schedules of Contributions Rates

Taxable Payrolls  for Effective Tax Schedule

            Rate

From   To  Class     AA  A      B      C      D      E  F

0.00 5.00 1    0.48 0.48 0.58   0.98   1.48   1.88   2.48

5.01 10.00 2    0.48 0.48 0.78   1.18   1.68   2.08   2.68

10.01 15.00 3    0.58 0.58 0.98   1.38   1.78   2.28   2.88

15.01 20.00 4    0.58 0.78 1.18   1.58   1.98   2.48   3.08

20.01 25.00 5    0.78 0.98 1.38   1.78   2.18   2.68   3.18

25.01 30.00 6    0.98 1.18 1.58   1.98   2.38   2.78   3.28

30.01 35.00 7    1.08 1.38 1.78   2.18   2.58   2.98   3.38

35.01 40.00 8    1.28 1.58 1.98   2.38   2.78   3.18   3.58

40.01 45.00 9    1.48 1.78 2.18   2.58   2.98   3.38   3.78

45.01 50.00 10    1.68 1.98 2.38   2.78   3.18   3.58   3.98

50.01 55.00 11    1.98 2.28 2.58   2.98   3.38   3.78   4.08

55.01 60.00 12    2.18 2.48 2.78   3.18   3.58   3.98   4.28

60.01 65.00 13    2.38 2.68 2.98   3.38   3.78   4.18   4.48

65.01 70.00 14    2.58 2.88 3.18   3.58   3.98   4.38   4.68

70.01 75.00 15    2.88 3.08 3.38   3.78   4.18   4.58   4.78

75.01 80.00 16    3.08 3.28 3.58   3.98   4.38   4.68   4.88

80.01 85.00 17    3.28 3.48 3.78   4.18   4.58   4.88   4.98

85.01 90.00 18    3.68 3.88 4.18   4.58   4.88   4.98   5.18

90.01 95.00 19    4.08 4.28 4.58   4.98   5.08   5.18   5.38

95.01 100.00 20   5.40 5.40 5.40   5.40   5.40   5.40   5.40

    (6) The contribution rate for each employer not qualified to be in the array shall be as follows:

    (a) Employers who do not meet the definition of "qualified employer" by reason of failure to pay contributions when due shall be assigned the contribution rate of five and six-tenths percent, except employers who have an approved agency-deferred payment contract by September 30 of the previous rate year.  If any employer with an approved agency-deferred payment contract fails to make any one of the succeeding deferred payments or fails to submit any succeeding tax report and payment in a timely manner, the employer's tax rate shall immediately revert to five and six-tenths percent for the current rate year;

    (b) The contribution rate for employers exempt as of December 31, 1989, who are newly covered under the section 78, chapter 380, Laws of 1989 amendment to RCW 50.04.150 and not yet qualified to be in the array shall be 2.5 percent for employers whose standard industrial code is "013", "016", "017", "018", "019", "021", or "081"; and

    (c) For all other employers not qualified to be in the array, the contribution rate shall be a rate equal to the average industry rate as determined by the commissioner; however, the rate may not be less than one percent.  Assignment of employers by the commissioner to industrial classification, for purposes of this subsection, shall be in accordance with established classification practices found in the "Standard Industrial Classification Manual" issued by the federal office of management and budget to the third digit provided in the Standard Industrial Classification code.

NEW SECTION. Sec. 3.  (1) Section 1 of this act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect immediately.

    (2) Section 2 of this act shall take effect January 1, 1998.

NEW SECTION. Sec. 4.  Section 1 of this act expires January 1, 1998.

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