AN ACT Relating to unemployment insurance coverage for service performed in agricultural employment; amending RCW 50.04.150 and 50.29.025; creating a new section; and providing an effective date.

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

Sec. 1. Section 16, chapter 35, Laws of 1945 as last amended by section 2, chapter 292, Laws of 1977 ex. sess. and RCW 50.04.150 are each amended to read as follows:

The term "employment" shall not include service performed by individuals under eighteen years of age in agricultural labor except as otherwise provided in RCW 50.04.155.

Agricultural labor is defined as services performed:

(1) On a farm, in the employ of any person, in connection with the cultivation of the soil, or in connection with raising or harvesting any agricultural or horticultural commodity, including raising, shearing, feeding, caring for, training, and management of livestock, bees, poultry, and furbearing animals and wild life, or in the employ of the owner or tenant or other operator of a farm in connection with the operation, management, conservation, improvement, or maintenance of such farm and its tools and equipment; or

(2) In packing, packaging, grading, storing, or delivering to storage, or to market or to a carrier for transportation to market, any agricultural or horticultural commodity; but only if such service is performed as an incident to ordinary farming operations. The exclusions from the term "employment" provided in this paragraph shall not be deemed to be applicable with respect to commercial packing houses, commercial storage establishments, commercial canning, commercial freezing, or any other commercial processing or with respect to services performed in connection with the cultivation, raising, harvesting and processing of oysters or raising and harvesting of mushrooms or in connection with any agricultural or horticultural commodity after its delivery to a terminal market for distribution for consumption.

Sec. 2. Section 5, chapter 205, Laws of 1984 as last amended by section 3, chapter 171, Laws of 1987 and RCW 50.29.025 are each 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:

!tm2,1,1 !tcInterval!sc ,1of!sc ,1the

!tcFund!sc ,1Balance!sc ,1Ratio!tj1!tcEffective

!tcExpres!ttsed!sc ,1as!sc ,1a!sc ,1Percentage!tj1!tcTax!sc ,1Sc!tthedule

!tl3.40 and!sc ,1above!tcA

!tl2.90 to 3.39!tcB

!tl2.40 to 2.89!tcC

!tl1.90 to 2.39!tcD

!tl1.40 to 1.89!tcE

!tlLess!sc ,1than!sc ,0011.40!tcF

(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:

!tp1,4 !tcPercent!sc ,1of

!tcCumulative!tj1!trSchedule!sc ,1of!sc ,1Contribution!sc ,1Rates!sc ,1for

!tcTaxable!sc ,1Pa!ttyrolls!trEffective!sc ,1Tax!sc ,1Schedule!sc ,6

!tm1,2,1,1,1,1,1,1,1 !tj2!tcRate

From!tj1!tcTo!tcClass!tlA!tcB!tcC !tcD!tcE!tcF

!sc ,0010.00!tj1!tc5. 00!tc1!tc0.48!tc0.58!tc0.98!tc1.48!tc1.88!tc2.48

!sc ,0015.01!tj1!tc10.00!tc2!tc0.48!tc0.78!tc1.18!tc1.68!tc2.08!tc2.68

10.01!tj1!tc15.00!tc3!tc0.58!tc0.98!tc1.38!tc1.78!tc2.28!tc2.88

15.01!tj1!tc20.00!tc 4!tc0.78!tc1.18!tc1.58!tc1.98!tc2.48!tc3.08

20.01!tj1!tc25.00!tc5!tc0.98!tc1.38!tc1.78!tc2.18!tc2.68!tc3.18

25.01!tj1!tc30.00!tc6!tc1.18!tc1.58!tc1.98!tc2.38!tc2.78!tc3.28

30.01!tj1!tc35.00!tc7!tc1.38!tc1.78!tc2.18!tc2.58!tc2.98!tc3.38

35.01!tj1!tc40.00!tc8!tc1.58!tc1.98!tc2.38!tc2.78!tc3.18!tc3.58

40.01!tj1!tc45.00!tc9!tc1.78!tc2.18!tc2.58!tc2.98!tc3.38!tc3.78

45.01!tj1!tc50.00!tc10!tc1.98!tc2.38!tc2.78!tc3.18!tc3.58!tc3.98

50.01!tj1!tc55.00!tc11!tc2.28!tc2.58!tc2.98!tc3.38!tc3.78!tc4.08

55.01!tj1!tc60.00!tc12!tc2.48!tc2.78!tc3.18!tc3.58!tc3.98!tc4.28

60.01!tj1!tc65.00!tc13!tc2.68!tc2.98!tc3.38!tc3.78!tc4.18!tc4.48

65.01!tj1!tc70.00!tc14!tc2.88!tc3.18!tc3.58!tc3.98!tc4.38!tc4.68

70.01!tj1!tc75.00!tc15!tc3.08!tc3.38!tc3.78!tc4.18!tc4.58!tc4.78

75.01!tj1!tc80.00!tc16!tc3.28!tc3.58!tc3.98!tc4.38!tc4.68!tc4.88

80.01!tj1!tc85.00!tc17!tc3.48!tc3.78!tc4.18!tc4.58!tc4.88!tc4.98

85.01!tj1!tc90.00!tc18!tc3.88!tc4.18!tc4.58!tc4.88!tc4.98!tc5.18

90.01!tj1!tc95.00!tc19!tc4.28!tc4.58!tc4.98!tc5.08!tc5.18!tc5.38

95.01!tj1!tc100.00!tc20!tc5.40!tc5.40!tc5.40!tc5.40!tc5.40!tc5.40

(6) The contribution rate for each employer not qualified to be in the array shall be ((~~a rate equal to the average industry tax rate as determined by the commissioner; however, the rate may not be less than one percent: PROVIDED, That~~)) 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 four-tenths percent;

(b) The tax rate for employers newly covered under section 1 of this 1988 act and not yet qualified to be in the array shall be one percent; 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. 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, 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.

NEW SECTION. Sec. 4. This act shall take effect January 1, 1989.