AN ACT Relating to implementation by state agencies of a unified system for business identification, reporting, and compliance; amending RCW 50.12.220, 50.24.040, 50.24.070, 50.24.110, 50.32.030, 51.16.190, 51.48.210, and 18.27.030; creating new sections; and providing an effective date.

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

NEW SECTION. Sec. 1. The legislature finds that improving service to the business community and improving the efficiency of state government are goals that can be assisted by simplifying and consolidating the business reporting and taxation system. To accomplish these goals, similar registration, reporting, compliance, and enforcement authority should be accorded to those agencies that collect state taxes. In particular, reporting and compliance for the payroll taxes that fund unemployment insurance and industrial insurance should be coordinated whenever possible. Accordingly, the employment security department, the department of labor and industries, and the department of revenue are directed to examine and test the feasibility of unified business identification, reporting, and compliance and make recommendations to the legislature by January 1, 1988.

Sec. 2. Section 1, chapter 190, Laws of 1979 ex. sess. and RCW 50.12.220 are each amended to read as follows:

(1) If an employer fails to file in a timely and complete manner a report required by RCW 50.12.070 as now or hereafter amended or the rules adopted pursuant thereto, the employer shall be subject to a minimum penalty of ten dollars per violation ((~~in addition to any other administrative, civil, or criminal sanctions which may apply~~)).

(2) If contributions are not paid on the date on which they are due and payable as prescribed by the commissioner, there shall be assessed a penalty of ((~~four~~)) five percent of the amount of the contributions for the first month or part thereof of delinquency; there shall be assessed a total penalty of ((~~nine~~)) ten percent of the amount of the contributions for the second month or part thereof of delinquency; and there shall be assessed a total penalty of ((~~nineteen~~)) twenty percent of the amount of the contributions for the third month or part thereof of delinquency. No penalty so added shall be less than ((~~two~~)) ten dollars. These penalties are in addition to the interest charges assessed under RCW 50.24.040.

(3) Penalties shall not accrue on contributions from an estate in the hands of a receiver, executor, administrator, trustee in bankruptcy, common law assignee, or other liquidating officer subsequent to the date when such receiver, executor, administrator, trustee in bankruptcy, common law assignee, or other liquidating officer qualifies as such, but contributions accruing with respect to employment of persons by a receiver, executor, administrator, trustee in bankruptcy, common law assignee, or other liquidating officer shall become due and shall be subject to penalties in the same manner as contributions due from other employers.

(4) Where adequate information has been furnished to the department and the department has failed to act or has advised the employer of no liability or inability to decide the issue, penalties shall be waived by the commissioner. Penalties may also be waived for good cause if the commissioner determines that the failure to timely file reports or pay contributions was not due to the employer's fault.

(5) Any decision to assess a penalty as provided by this section shall be made by the chief administrative officer of the tax branch or his or her designee.

(6) Nothing in this section shall be construed to deny an employer the right to appeal the assessment of any penalty. Such appeal shall be made in the manner provided in RCW 50.32.030.

((~~(7) This section is applicable to contributions due and payable on wages paid after December 31, 1979, and tax reports which are due for the quarter ending March 31, 1980, and subsequent quarters.~~))

Sec. 3. Section 92, chapter 35, Laws of 1945 as last amended by section 8, chapter 158, Laws of 1973 1st. ex. sess. and RCW 50.24.040 are each amended to read as follows:

If contributions are not paid on the date on which they are due and payable as prescribed by the commissioner, the whole or part thereof remaining unpaid shall bear interest at the rate of one percent per month or fraction thereof from and after such date until payment plus accrued interest is received by him. ((~~Interest shall not accrue in excess of twenty-four percent for delinquent contributions for any one contributions period.~~)) The date as of which payment of contributions, if mailed, is deemed to have been received may be determined by such regulations as the commissioner may prescribe. Interest collected pursuant to this section shall be paid into the administrative contingency fund. Interest shall not accrue on contributions from any estate in the hands of a receiver, executor, administrator, trustee in bankruptcy, common law assignee or other liquidating officer subsequent to the date when such receiver, executor, administrator, trustee in bankruptcy, common law assignee or other liquidating officer qualifies as such, but contributions accruing with respect to employment of persons by any receiver, executor, administrator, trustee in bankruptcy, common law assignee or other liquidating officer shall become due and shall draw interest in the same manner as contributions due from other employers. Where adequate information has been furnished the department and the department has failed to act or has advised the employer of no liability or inability to decide the issue, interest may be waived.

Sec. 4. Section 95, chapter 35, Laws of 1945 as amended by section 3, chapter 190, Laws of 1979 ex. sess. and RCW 50.24.070 are each amended to read as follows:

At any time after the commissioner shall find that any contributions, interest, or penalties have become delinquent, the commissioner may issue an order and notice of assessment specifying the amount due, which order and notice of assessment shall be served upon the delinquent employer in the manner prescribed for the service of a summons in a civil action, ((~~except that if the employer cannot be found within the state, said order and notice will be deemed to be served when mailed to the delinquent employer at his last known address by registered mail~~)) or by certified mail to the last known address of the employer as shown by the records of the department. Failure of the employer to receive such notice or order whether served or mailed shall not release the employer from any tax, or any interest or penalties thereon.

Sec. 5. Section 99, chapter 35, Laws of 1945 as last amended by section 7, chapter 190, Laws of 1979 ex. sess. and RCW 50.24.110 are each amended to read as follows:

The commissioner is hereby authorized to issue to any person, firm, corporation, political subdivision or department of the state, a notice and order to withhold and deliver property of any kind whatsoever when he has reason to believe that there is in the possession of such person, firm, corporation, political subdivision or department, property which is due, owing, or belonging to any person, firm, or corporation upon whom the department has served a benefit over payment assessment or a notice and order of assessment ((~~has been served by the employment security department of the state~~)) for unemployment compensation contributions, interest, or penalties. The effect of a notice to withhold and deliver shall be continuous from the date such notice and order to withhold and deliver is first made until the liability is satisfied or becomes unenforceable because of a lapse of time.

The notice and order to withhold and deliver shall be served by the sheriff of the county wherein the service is made, or by his deputy, or by any duly authorized representative of the commissioner. Any person, firm, corporation, political subdivision or department upon whom service has been made is hereby required to answer the notice within twenty days exclusive of the day of service, under oath and in writing, and shall make true answers to the matters inquired of in the notice.

In the event there is in the possession of any such person, firm, corporation, political subdivision or department, any property which may be subject to the claim of the employment security department of the state, such property shall be delivered forthwith to the commissioner or his duly authorized representative upon demand to be held in trust by the commissioner for application on the indebtedness involved or for return, without interest, in accordance with final determination of liability or nonliability, or in the alternative, there shall be furnished a good and sufficient bond satisfactory to the commissioner conditioned upon final determination of liability.

Should any person, firm or corporation fail to make answer to an order to withhold and deliver within the time prescribed herein, it shall be lawful for the court, after the time to answer such order has expired, to render judgment by default against such person, firm or corporation for the full amount claimed by the commissioner in the notice to withhold and deliver, together with costs.

Sec. 6. Section 119, chapter 35, Laws of 1945 as last amended by section 20, chapter 23, Laws of 1983 1st ex. sess. and RCW 50.32.030 are each amended to read as follows:

When an order and notice of assessment has been served upon or mailed to a delinquent employer, as heretofore provided, such employer may within ((~~ten~~)) thirty days thereafter file a petition in writing with the appeal tribunal, stating that such assessment is unjust or incorrect and requesting a hearing thereon. Such petition shall set forth the reasons why the assessment is objected to and the amount of contributions, if any, which said employer admits to be due the employment security department. If no such petition be filed with the appeal tribunal within ((~~said ten~~)) thirty days, ((~~said~~)) the assessment shall be conclusively deemed to be just and correct: PROVIDED, That in such cases, and in cases where payment of contributions, interest, or penalties has been made pursuant to a jeopardy assessment, the commissioner may properly entertain a subsequent application for refund. The filing of a petition on a disputed assessment with the appeal tribunal shall stay the distraint and sale proceeding provided for in this title until a final decision thereon shall have been made, but the filing of such petition shall not affect the right of the commissioner to perfect a lien, as provided by this title, upon the property of the employer. The filing of a petition on a disputed assessment shall stay the accrual of interest and penalties on the disputed contributions until a final decision shall have been made thereon.

Within ((~~ten~~)) thirty days after notice of denial of refund or adjustment has been mailed or delivered (whichever is the earlier) to an employer, the employer may file a petition in writing with the appeal tribunal for a hearing thereon: PROVIDED, That this right shall not apply in those cases in which assessments have been appealed from and have become final. The petitioner shall set forth the reasons why such hearing should be granted and the amount which the petitioner believes should be adjusted or refunded. If no such petition be filed within said ((~~ten~~)) thirty days, the determination of the commissioner as stated in said notice shall be final.

Sec. 7. Section 27, chapter 323, Laws of 1977 ex. sess. as amended by section 5, chapter 315, Laws of 1985 and RCW 51.16.190 are each amended to read as follows:

(1) "Action" means, but is not limited to, a notice of assessment pursuant to RCW 51.48.120, an action at law pursuant to RCW 51.16.150, or any other administrative or civil process authorized by this title for the determination of liability for premiums, assessments, penalties, contributions, or other sums, or the collection of premiums, assessments, penalties, contributions, or other sums.

(2) Any action((~~, other than in cases of fraud,~~)) to collect any delinquent premium, assessment, contribution, penalty, or other sum due to the department from any employer subject to this title shall be brought within three years of the date any such sum became due.

(3) In case of a false or fraudulent report with intent to evade premiums, assessments, contributions, penalties, interest, or other sums, or in the event of a failure to file a report, action may be begun at any time.

(4) Any claim for refund or adjustment by an employer of any premium, assessment, contribution, penalty, or other sum collected by the department shall be made in writing to the department within three years of the date the sum became due.

Sec. 8. Section 18, chapter 9, Laws of 1986 and RCW 51.48.210 are each amended to read as follows:

If payment of any tax due is not received by the department by the due date, there shall be assessed a penalty of five percent of the amount of the tax((; and if the tax is not received within thirty days after the due date, there shall be assessed a total penalty of ten percent of the amount of the tax; and if the tax is not received within sixty days after the due date, there shall be assessed a total penalty of twenty percent of the amount of the tax)) for the first month or part thereof of delinquency; there shall be assessed a total penalty of ten percent of the amount of the tax for the second month or part thereof of delinquency; and there shall be assessed a total penalty of twenty percent of the amount of the tax for the third month or part thereof of delinquency. No penalty so added may be less than ten dollars. If a warrant is issued by the department for the collection of taxes, increases, and penalties, there shall be added thereto a penalty of five percent of the amount of the tax, but not less than five dollars nor greater than one hundred dollars. ((~~Warrants shall earn~~)) In addition, delinquent taxes shall bear interest at the rate of one percent of the delinquent amount ((~~of such warrant~~)) per month or fraction thereof from and after the due date ((~~of entry of such warrant~~)) until payment, increases, and penalties are received by the department.

Sec. 9. Section 3, chapter 77, Laws of 1963 as amended by section 3, chapter 153, Laws of 1973 1st ex. sess. and RCW 18.27.030 are each amended to read as follows:

An applicant for registration as a contractor shall submit an application under oath upon a form to be prescribed by the director and which shall include the following information pertaining to the applicant:

(1) Employer social security number.

(2) Industrial insurance number.

(3) Employment security department number.

(4) State excise tax registration number.

(5) Unified business identifier (UBI) account number may be substituted for the information required by subsections (2), (3), and (4) of this section.

(6) Type of contracting activity, whether a general or a specialty contractor and if the latter, the type of specialty.

((~~(6)~~)) (7) The name and address of each partner if the applicant be a firm or partnership, or the name and address of the owner if the applicant be an individual proprietorship, or the name and address of the corporate officers and statutory agent, if any, if the applicant be a corporation. The information contained in such application shall be a matter of public record and open to public inspection.

NEW SECTION. Sec. 10. If any part of this act is found to be in conflict with federal requirements which 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 which 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. 11. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 12. This act shall take effect July 1, 1987. Sections 2 and 8 of this act shall be effective for quarters beginning on and after July 1, 1987.