5359-S.E

AN ACT Relating to self-employment for unemployed claimants; amending RCW 50.16.030; adding a new chapter to Title 50 RCW; and creating new sections.

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

NEW SECTION. Sec. 1. The legislature finds that the passage of the North American free trade agreement offers both substantial opportunities for economic growth for the state and the potential for displacement of workers. To assist unemployed individuals in taking advantage of these opportunities, the federal government has authorized states to establish a self-employment assistance program as part of the state's unemployment insurance program. The legislature finds that the establishment of a self-employment assistance program would create new businesses and job opportunities in Washington state.

NEW SECTION. Sec. 2. (1) An unemployed individual is eligible to participate in a self-employment assistance program if it has been determined that he or she:

(a) Is otherwise eligible for regular unemployment benefits as defined in RCW 50.22.010(5);

(b) Has been identified as likely to exhaust regular unemployment benefits under a profiling system established by the commissioner as defined in P.L. 103-152;

(c) Is enrolled in a self-employment assistance program that is approved by the commissioner, and includes entrepreneurial training, business counseling, and technical assistance; and

(d) Is actively engaged on a full-time basis in activities relating to the establishment of a business and becoming self-employed. The self-employment assistance program administrators will determine whether the claimant is engaged on a full-time basis.

(2) Individuals participating in a self-employment assistance program approved by the commissioner are eligible to receive a self-employment allowance in lieu of regular benefits, payable in the same weekly benefit amount, at the same interval, on the same terms, and subject to the same conditions as regular unemployment benefits, except that:

(a) The requirements of RCW 50.20.010(3) and 50.20.080 relating to availability for work, active search for work, and refusal to accept suitable work are not applicable to such individual;

(b) Income earned from self-employment shall not be considered remuneration and shall not be deductible from the weekly benefit amount by reason of the application of RCW 50.20.130; and

(c) An individual who meets the requirements of this chapter is considered to be "unemployed" under RCW 50.04.310 and 50.20.010.

(3) An individual who fails to participate in his or her approved self-employment assistance program or who fails to actively engage on a full-time basis on activities relating to establishing a business shall be disqualified from self-employment allowances for the week such failure occurs. This individual may be eligible for regular benefits for such week if he or she meets all eligibility requirements for regular benefits.

(4) Benefits paid under chapter . . ., Laws of 1996 (this act) that exceed the average number of weeks paid for all claimants, based on the most recent data published by the employment security department on the effective date of the initial determination, shall not be charged to the experience rating account of any contribution paying employer.

NEW SECTION. Sec. 3. The commissioner shall take all steps necessary in carrying out this chapter to assure collaborative involvement of interested parties in program development, and to ensure that the self-employment assistance programs and self-employment allowances meet all federal criteria for withdrawal from the unemployment fund. The commissioner may approve, as self-employment assistance programs, existing self-employment training programs available through community colleges, private industry councils, or other organizations and is not obligated by chapter . . ., Laws of 1995 (this act) to expend any departmental funds for the operation of self-employment assistance programs, unless specific funding is provided to the department for that purpose through federal or state appropriations. No payments to individuals shall be made under this chapter until such time as a plan for such payments is approved by the Unites States department of labor.

Sec. 4. RCW 50.16.030 and 1983 1st ex.s. c 7 s 1 are each amended to read as follows:

(1) Moneys shall be requisitioned from this state's account in the unemployment trust fund solely for the payment of benefits, self-employment allowances, and repayment of loans from the federal government to guarantee solvency of the unemployment compensation fund in accordance with regulations prescribed by the commissioner, except that money credited to this state's account pursuant to section 903 of the social security act, as amended, shall be used exclusively as provided in RCW 50.16.030(5). The commissioner shall from time to time requisition from the unemployment trust fund such amounts, not exceeding the amounts standing to its account therein, as he deems necessary for the payment of benefits for a reasonable future period. Upon receipt thereof the treasurer shall deposit such moneys in the benefit account and shall issue his warrants for the payment of benefits solely from such benefits account.

(2) Expenditures of such moneys in the benefit account and refunds from the clearing account shall not be subject to any provisions of law requiring specific appropriations or other formal release by state officers of money in their custody, and RCW 43.01.050, as amended, shall not apply. All warrants issued by the treasurer for the payment of benefits, self-employment allowances, and refunds shall bear the signature of the treasurer and the countersignature of the commissioner, or his duly authorized agent for that purpose.

(3) Any balance of moneys requisitioned from the unemployment trust fund which remains unclaimed or unpaid in the benefit account after the expiration of the period for which sums were requisitioned shall either be deducted from estimates for, and may be utilized for the payment of, benefits and self-employment allowances during succeeding periods, or in the discretion of the commissioner, shall be redeposited with the secretary of the treasury of the United States of America to the credit of this state's account in the unemployment trust fund.

(4) Money credited to the account of this state in the unemployment trust fund by the secretary of the treasury of the United States of America pursuant to section 903 of the social security act, as amended, may be requisitioned and used for the payment of expenses incurred for the administration of this title pursuant to a specific appropriation by the legislature, provided that the expenses are incurred and the money is requisitioned after the enactment of an appropriation law which:

(a) specifies the purposes for which such money is appropriated and the amounts appropriated therefor,

(b) limits the period within which such money may be obligated to a period ending not more than two years after the date of the enactment of the appropriation law, and

(c) limits the amount which may be obligated during a twelve-month period beginning on July 1st and ending on the next June 30th to an amount which does not exceed the amount by which (i) the aggregate of the amounts credited to the account of this state pursuant to section 903 of the social security act, as amended, during the same twelve-month period and the thirty-four preceding twelve-month periods, exceeds (ii) the aggregate of the amounts obligated pursuant to RCW 50.16.030(4), (5) and (6) and charged against the amounts credited to the account of this state during any of such thirty-five twelve-month periods. For the purposes of RCW 50.16.030(4), (5) and (6), amounts obligated during any such twelve-month period shall be charged against equivalent amounts which were first credited and which are not already so charged; except that no amount obligated for administration during any such twelve-month period may be charged against any amount credited during such a twelve-month period earlier than the thirty-fourth twelve-month period preceding such period: PROVIDED, That any amount credited to this state's account under section 903 of the social security act, as amended, which has been appropriated for expenses of administration, whether or not withdrawn from the trust fund shall be excluded from the unemployment compensation fund balance for the purpose of experience rating credit determination.

(5) Money credited to the account of this state pursuant to section 903 of the social security act, as amended, may not be withdrawn or used except for the payment of benefits, self-employment allowances, and for the payment of expenses of administration and of public employment offices pursuant to RCW 50.16.030(4), (5) and (6).

(6) Money requisitioned as provided in RCW 50.16.030(4), (5) and (6) for the payment of expenses of administration shall be deposited in the unemployment compensation fund, but until expended, shall remain a part of the unemployment compensation fund. The commissioner shall maintain a separate record of the deposit, obligation, expenditure and return of funds so deposited. Any money so deposited which either will not be obligated within the period specified by the appropriation law or remains unobligated at the end of the period, and any money which has been obligated within the period but will not be expended, shall be returned promptly to the account of this state in the unemployment trust fund.

NEW SECTION. Sec. 5. If any part of this act is found to be in conflict with federal requirements that 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 that 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. 6. The commissioner may adopt rules as necessary to address the relationship of chapter . . ., Laws of 1995 (this act) to eligibility for conventional unemployment insurance benefits, definitions, program eligibility, program review, and compliance with applicable federal laws and regulations.

NEW SECTION. Sec. 7. Sections 1 through 3 of this act shall constitute a new chapter in Title 50 RCW.