AN ACT
Relating to determining unemployment insurance compensation rates; reenacting
and amending RCW 50.29.025 and 50.29.025; creating a new section; 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)) 1.70 to 2.09 C
((1.90
to 2.39)) 1.30 to 1.69 D
((1.40
to 1.89)) 1.00 to 1.29 E
Less
than ((1.40)) 1.00 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)) 1.70 to 2.09 C
((1.90
to 2.39)) 1.30 to 1.69 D
((1.40
to 1.89)) 1.00 to 1.29 E
Less than ((1.40))
1.00 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) The employment
security department in consultation with the senate and house of
representatives standing committees shall undertake a study of the unemployment
insurance trust fund and the financing provisions of the state's unemployment
insurance law. The study shall examine:
(a) The historical
costs of the state's unemployment program and provide estimates of the expected
future costs of the program at average and recession levels;
(b) The ability of the
current financing system along with other system models to meet expected
average costs for the remainder of this decade and into the next century;
(c) The ability of the
system to provide for a trust fund capable of paying benefits during projected future
recessions;
(d) The advantages and
disadvantages of modifying the existing funding mechanism; and
(e) Any other issues
deemed necessary by the commissioner of employment security in consultation
with the appropriate chairpersons of the house of representatives and senate
standing committees.
(2) The department may
contract with a consulting firm in order to perform the study under this
section.
(3) The department
shall report to the legislature on the findings of its study, including
recommendations for changes, if any, in the current financing provisions. The
department shall deliver its final report to the legislature by January 1,
1996.
NEW SECTION. Sec.
4. (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.
5. Section 1 of this act
shall expire January 1, 1998.
