BILL REQ. #:  H-4350.1 

Read first time 01/26/2004.   Referred to Committee on Commerce & Labor.

     AN ACT Relating to liability for industrial insurance premiums of subcontractors; and amending RCW 51.12.050 and 51.12.070.

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

Sec. 1   RCW 51.12.050 and 2001 c 138 s 2 are each amended to read as follows:
     (1) Whenever a public entity engages in any work, or lets a contract therefor, in which workers are employed for wages, this title shall be applicable thereto. The employer's payments into the accident fund shall be made from the treasury of the public entity. If the work is being done by contract, the payroll of the contractor and the subcontractor shall be the basis of computation and, in the case of contract work consuming less than one year in performance, the required payment into the accident fund shall be based upon the total payroll. The contractor and any subcontractor shall be subject to the provisions of this title, and the state for its general fund, the county, municipal corporation, or other taxing district shall be entitled to collect from the contractor the full amount payable to the accident fund and the contractor, in turn, shall be entitled to collect from the subcontractor his or her proportionate amount of the payment.
     (2)(a) A public entity may seek partnerships with volunteer groups and businesses to engage in community improvement projects to benefit the public entity. In administering a project, the public entity must:
     (i) Provide prospective donors and participants written notice of the risks and responsibilities to be assumed by the public entity and the donors or participants. A volunteer donating labor on the project must, before beginning work, document in writing that he or she has received the notice and that he or she is donating labor as a result of his or her own free choice; and
     (ii) Pay premiums and assessments required under this title to secure medical aid benefits under chapter 51.36 RCW for volunteers donating labor on the project.
     (b) A contractor or employer donating equipment or materials for use on a community improvement project shall not, for the purposes of this title, be considered the employer of an individual donating labor unless the contractor or employer pays the individual wages for working on the project or makes working on the project a condition of employment. This subsection applies regardless of whether:
     (i) The contractor or employer informs the individual about the community improvement project or encourages the individual to donate labor on the project;
     (ii) The individual uses equipment or materials on the project that are donated by the contractor or the individual's employer; or
     (iii) The individual is granted maintenance or reimbursement for actual expenses necessarily incurred in performing labor for the project.
     (3) Whenever and so long as, by state law, city charter, or municipal ordinance, provision is made for employees or peace officers injured in the course of employment, such employees shall not be entitled to the benefits of this title and shall not be included in the payroll of the municipality under this title: PROVIDED, That whenever any state law, city charter, or municipal ordinance only provides for payment to the employee of the difference between his or her actual wages and that received under this title such employees shall be entitled to the benefits of this title and may be included in the payroll of the municipality.
     (4) For the purposes of this section, a public entity is not responsible for any premiums upon the work of any subcontractor if the subcontractor has an industrial insurance account in good standing with the department when the contract is let.
     (5) The definitions in this subsection apply throughout this section, unless the context clearly requires otherwise.
     (a) "Community improvement project" means a project sponsored by a public entity that uses donated labor, materials, or equipment and includes, but is not limited to, projects to repair, restore, or preserve historic property.
     (b) "Historic property" means real property owned by a public entity including, but not limited to, barns, schools, military structures, and cemeteries.
     (c) "Public entity" means the state, county, any municipal corporation, or other taxing district.

Sec. 2   RCW 51.12.070 and 1981 c 128 s 4 are each amended to read as follows:
     (1) The provisions of this title shall apply to all work done by contract; the person, firm, or corporation who lets a contract for such work shall be responsible primarily and directly for all premiums upon the work. The contractor and any subcontractor shall be subject to the provisions of this title and the person, firm, or corporation letting the contract shall be entitled to collect from the contractor the full amount payable in premiums and the contractor in turn shall be entitled to collect from the subcontractor his proportionate amount of the payment.
     (2) For the purposes of this section, a contractor registered under chapter 18.27 RCW or licensed under chapter 19.28 RCW shall not be responsible for any premiums upon the work of any subcontractor if:
     (((1))) (a) The subcontractor is currently engaging in a business which is registered under chapter 18.27 RCW or licensed under chapter 19.28 RCW;
     (((2))) (b) The subcontractor has a principal place of business which would be eligible for a business deduction for internal revenue service tax purposes other than that furnished by the contractor for which the business has contracted to furnish services;
     (((3))) (c) The subcontractor maintains a separate set of books or records that reflect all items of income and expenses of the business; and
     (((4))) (d) The subcontractor has contracted to perform:
     (((a))) (i) The work of a contractor as defined in RCW 18.27.010; or
     (((b))) (ii) The work of installing wires or equipment to convey electric current or installing apparatus to be operated by such current as it pertains to the electrical industry as described in chapter 19.28 RCW.
     (3) For the purposes of this section, a contractor is not responsible for any premiums upon the work of any subcontractor if the subcontractor has an industrial insurance account in good standing with the department when the contract is let.
     (4) It shall be unlawful for any county, city or town to issue a construction building permit to any person who has not submitted to the department an estimate of payroll and paid premium thereon as provided by chapter 51.16 RCW of this title or proof that such person has qualified as a self-insurer.