H-2132

AN ACT Relating to liens filed by the department of social and health services; amending RCW 43.20B.720, 43.20B.730, 43.20B.735, 43.20B.740, 43.20B.030, 74.20A.070, and 74.20A.080; and repealing RCW 43.20B.725.

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

Sec. 1. RCW 43.20B.720 and 1985 c 245 s 7 are each amended to read as follows:

((~~By accepting~~)) (1) To avoid a duplicate payment of benefits, a recipient of public assistance from the department of social and health services((~~, the recipient thereof shall be~~)) is deemed to have subrogated ((~~said~~)) the department to the recipient's right to recover ((~~time loss~~)) temporary total disability compensation due to ((~~such~~)) the recipient and ((~~his or her~~)) the recipient's dependents ((~~pursuant to the provisions of~~)) under Title 51 RCW, to the extent of such assistance or compensation, whichever is less((~~, furnished to the recipient and his or her dependents for or during the period for which time loss compensation is payable: PROVIDED, That~~)). However, the amount to be repaid to the department of social and health services shall bear its proportionate share of attorney's fees and costs, if any, incurred under Title 51 RCW by the ((~~injured worker~~)) recipient or the ((~~worker's~~)) recipient's dependents.

(2) The department of social and health services may assert and enforce a lien and notice to withhold and deliver ((~~as hereinafter provided~~)) to secure reimbursement ((~~of any public assistance paid for or during the period and for the purposes expressed in this section~~)). The department shall identify in the lien and notice to withhold and deliver the recipient of public assistance and temporary total disability compensation and the amount claimed by the department.

Sec. 2. RCW 43.20B.730 and 1987 c 75 s 34 are each amended to read as follows:

The effective date of the ((~~statement of~~)) lien and notice to withhold and deliver provided in RCW ((~~43.20B.725, shall be~~)) 43.20B.720 is the day that it is received by the ((~~director of the~~)) department of labor and industries((~~, an employee of the director's office of suitable discretion,~~)) or a self-insurer as defined in chapter 51.08 RCW((~~: PROVIDED, That~~)). Service of ((~~such statement of~~)) the lien and notice to withhold and deliver may be made personally ((or)), by regular mail((,)) with postage prepaid((~~: PROVIDED, FURTHER, That a copy of the~~)), or by electronic means. A statement of lien and notice to withhold and deliver shall be mailed to the recipient at the recipient's last known address by certified mail, return receipt requested, no later than ((~~the next~~)) two business days after ((~~such statement of~~)) the department mails, delivers, or transmits the lien and notice to withhold and deliver ((~~has been mailed or delivered~~)) to the department of labor and industries or ((to)) a self-insurer ((~~as defined in chapter 51.08 RCW~~)).

Sec. 3. RCW 43.20B.735 and 1973 1st ex.s. c 102 s 4 are each amended to read as follows:

The director of ((~~the department of~~)) labor and industries or the director's designee, or a self-insurer as defined in chapter 51.08 RCW, following receipt of the ((~~statement of~~)) lien and notice to withhold and deliver, shall deliver to the secretary of ((~~the department of~~)) social and health services or ((~~his~~)) the secretary's designee any ((~~funds~~)) temporary total disability compensation payable to the recipient named in the lien and notice to withhold and deliver up to the amount claimed ((~~he may hold, or which may at any time come into his possession,~~)). The director of labor and industries or self-insurer shall withhold and deliver from funds currently in the director's or self-insurer's possession or from any funds that may at any time come into the director's or self-insurer's possession on account of ((~~time loss~~)) temporary total disability compensation payable to ((~~said~~)) the recipient ((~~for or during the period stated, immediately upon a final determination of the recipient's entitlement to the time loss compensation in accordance with the provisions of Title 51 RCW~~)) named in the lien and notice to withhold and deliver.

Sec. 4. RCW 43.20B.740 and 1989 c 175 s 101 are each amended to read as follows:

((~~Any person~~)) A recipient feeling aggrieved by the action of the department of social and health services in ((~~impounding~~)) recovering his or her ((~~time loss~~)) temporary total disability compensation as provided in RCW 43.20B.720 through 43.20B.745 shall have the right to an adjudicative proceeding.

((~~Any such person who desires a hearing shall,~~)) A recipient seeking an adjudicative proceeding shall file an application with the secretary within twenty-eight days after the statement of lien and notice to withhold and deliver ((~~has been~~)) was mailed to ((~~or served upon the director of the department of labor and industries and said appellant, file with the secretary an application for an adjudicative proceeding~~)) the recipient. If the recipient files an application more than twenty-eight days after, but within one year of, the date the statement of lien and notice to withhold and deliver was mailed, the recipient is entitled to a hearing if the recipient shows good cause for the recipient's failure to file a timely application. The filing of a late application does not affect prior collection action pending the final adjudicative order. Until good cause for failure to file a timely application is decided, the department may continue to collect under the lien and notice to withhold and deliver.

The proceeding shall be governed by chapter 34.05 RCW, the Administrative Procedure Act.

Sec. 5. RCW 43.20B.030 and 1989 c 78 s 4 are each amended to read as follows:

(1) Except as otherwise provided by law, there will be no collection of overpayments and other debts due the department after the expiration of six years from the date of notice of such overpayment or other debt unless the department has commenced recovery action in a court of law or unless an administrative remedy authorized by statute is in place. However, any amount due in a case thus extended shall cease to be a debt due the department at the expiration of ten years from the date of the notice of the overpayment or other debt unless a court-ordered remedy would be in effect for a longer period.

(2)(a) The department, at any time, may accept offers of compromise of disputed claims or may grant partial or total write-off of any debt due the department if it is no longer cost-effective to pursue. The department shall adopt rules establishing the considerations to be made in the granting or denial of a partial or total write-off of debts.

(b) Beginning December 1, 1997, the department shall report by December 1 each year to the commerce and labor committees of the senate and house of representatives, the senate ways and means committee, and the house appropriations committee, or successor committees, the following information:

(i) The cumulative amount of debt due the department;

(ii) The cumulative amount of debt that has been written off by the department as no longer cost-effective to pursue;

(iii) The amount of debt due the department that has accrued in each of the previous five fiscal years; and

(iv) The amount of debt that has been written off in each of the previous five fiscal years as no longer cost-effective to pursue.

Sec. 6. RCW 74.20A.070 and 1973 1st ex.s. c 183 s 8 are each amended to read as follows:

(1) The secretary may at any time after filing of a support lien serve a copy of ((~~said~~)) the lien upon any person, firm, corporation, association, political subdivision, or department of the state in possession of earnings, or deposits or balances held in any bank account of any nature which are due, owing, or belonging to said debtor. ((~~Said~~))

(2) The support lien shall be served upon the person, firm, corporation, association, political subdivision, or department of the state ((~~either~~)):

(a) In the manner prescribed for the service of summons in a civil action ((or));

(b) By certified mail, return receipt requested; or

(c) By electronic means if there is an agreement between the secretary and the person, firm, corporation, association, political subdivision, or department of the state to accept service by electronic means.

(3) No lien filed under RCW 74.20A.060 shall have any effect against earnings or bank deposits or balances unless it states the amount of the support debt accrued and unless service upon ((~~said~~)) the person, firm, corporation, association, political subdivision, or department of the state in possession of earnings or bank accounts, deposits or balances is accomplished pursuant to this section.

Sec. 7. RCW 74.20A.080 and 1994 c 230 s 20 are each amended to read as follows:

(1) The secretary may issue to any person, firm, corporation, association, political subdivision, department of the state, or agency, subdivision, or instrumentality of the United States, an order to withhold and deliver property of any kind, including but not restricted to earnings which are or might become due, owing, or belonging to the debtor, when the secretary has reason to believe that there is in the possession of such person, firm, corporation, association, political subdivision, department of the state, or agency, subdivision, or instrumentality of the United States property which is or might become due, owing, or belonging to said debtor. Such order to withhold and deliver may be issued:

(a) When a support payment is past due, if a responsible parent's support order:

(I) Contains language directing the parent to make support payments to the Washington state support registry; and

(ii) Includes a statement that other income-withholding action under this chapter may be taken without further notice to the responsible parent, as provided for in RCW 26.23.050(1);

(b) Twenty-one days after service of a notice of support debt under RCW 74.20A.040;

(d) Twenty-one days after service of a notice of support owed under RCW 26.23.110;

(e) Twenty-one days after service of a notice and finding of financial responsibility under RCW 74.20A.055; or

(f) When appropriate under RCW 74.20A.270.

(2) The order to withhold and deliver shall:

(a) State the amount of the support debt accrued;

(b) State in summary the terms of RCW 74.20A.090 and 74.20A.100;

(I) In the manner prescribed for the service of a summons in a civil action ((or));

(ii) By certified mail, return receipt requested; or

(iii) By electronic means if there is an agreement between the secretary and the person, firm, corporation, association, political subdivision, department of the state, or agency, subdivision, or instrumentality of the United States to accept service by electronic means.

(3) Any person, firm, corporation, association, political subdivision, department of the state, or agency, subdivision, or instrumentality of the United States upon whom service has been made is hereby required to:

(a) Answer said order to withhold and deliver within twenty days, exclusive of the day of service, under oath and in writing, and shall make true answers to the matters inquired of therein; and

(b) Provide further and additional answers when requested by the secretary.

(4) Any such person, firm, corporation, association, political subdivision, department of the state, or agency, subdivision, or instrumentality of the United States in possession of any property which may be subject to the claim of the department of social and health services shall:

(a)(I) Immediately withhold such property upon receipt of the order to withhold and deliver; and

(ii) Deliver the property to the secretary as soon as the twenty-day answer period expires;

(iii) Continue to withhold earnings payable to the debtor at each succeeding disbursement interval as provided for in RCW 74.20A.090, and deliver amounts withheld from earnings to the secretary on the date earnings are payable to the debtor;

(iv) Inform the secretary of the date the amounts were withheld as requested under this section; or

(b) Furnish to the secretary a good and sufficient bond, satisfactory to the secretary, conditioned upon final determination of liability.

(5) An order to withhold and deliver served under this section shall not expire until:

(a) Released in writing by the office of support enforcement;

(b) Terminated by court order; or

(c) The person or entity receiving the order to withhold and deliver does not possess property of or owe money to the debtor for any period of twelve consecutive months following the date of service of the order to withhold and deliver.

(6) Where money is due and owing under any contract of employment, express or implied, or is held by any person, firm, corporation, or association, political subdivision, or department of the state, or agency, subdivision, or instrumentality of the United States subject to withdrawal by the debtor, such money shall be delivered by remittance payable to the order of the secretary.

(7) Delivery to the secretary of the money or other property held or claimed shall satisfy the requirement and serve as full acquittance of the order to withhold and deliver.

(8) A person, firm, corporation, or association, political subdivision, department of the state, or agency, subdivision, or instrumentality of the United States that complies with the order to withhold and deliver under this chapter is not civilly liable to the debtor for complying with the order to withhold and deliver under this chapter.

(9) The secretary may hold the money or property delivered under this section in trust for application on the indebtedness involved or for return, without interest, in accordance with final determination of liability or nonliability.

(10) Exemptions contained in RCW 74.20A.090 apply to orders to withhold and deliver issued under this section.

(11) The secretary shall also, on or before the date of service of the order to withhold and deliver, mail or cause to be mailed a copy of the order to withhold and deliver to the debtor at the debtor's last known post office address, or, in the alternative, a copy of the order to withhold and deliver shall be served on the debtor in the same manner as a summons in a civil action on or before the date of service of the order or within two days thereafter. The copy of the order shall be mailed or served together with a concise explanation of the right to petition for judicial review. This requirement is not jurisdictional, but, if the copy is not mailed or served as in this section provided, or if any irregularity appears with respect to the mailing or service, the superior court, in its discretion on motion of the debtor promptly made and supported by affidavit showing that the debtor has suffered substantial injury due to the failure to mail the copy, may set aside the order to withhold and deliver and award to the debtor an amount equal to the damages resulting from the secretary's failure to serve on or mail to the debtor the copy.

(12) An order to withhold and deliver issued in accordance with this section has priority over any other wage assignment, garnishment, attachment, or other legal process, except for another wage assignment, garnishment, attachment, or other legal process for child support.

(13) The office of support enforcement shall notify any person, firm, corporation, association, or political subdivision, department of the state, or agency, subdivision, or instrumentality of the United States required to withhold and deliver the earnings of a debtor under this action that they may deduct a processing fee from the remainder of the debtor's earnings, even if the remainder would otherwise be exempt under RCW 74.20A.090. The processing fee shall not exceed ten dollars for the first disbursement to the department and one dollar for each subsequent disbursement under the order to withhold and deliver.

NEW SECTION. Sec. 8. RCW 43.20B.725 and 1987 c 75 s 33, 1985 c 245 s 8, & 1973 1st ex.s. c 102 s 2 are each repealed.