SENATE BILL REPORT

EHB 2499

BYRepresentatives Prentice, Walker, Vekich and Winsley; by request of Department of Labor and Industries

Changing notice and withhold requirements when industrial insurance taxes are in arrears.

House Committe on Commerce & Labor

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):February 14, 1990; February 22, 1990

Majority Report:  Do pass.

      Signed by Senators Lee, Chairman; McMullen, Matson, Saling, Smitherman, Warnke, Williams.

Senate Staff:Dave Cheal (786-7576)

                  February 23, 1990

AS REPORTED BY COMMITTEE ON ECONOMIC DEVELOPMENT & LABOR, FEBRUARY 22, 1990

BACKGROUND:

A person who purchases a business may be liable for industrial insurance premiums that the business owed to the Department of Labor and Industries prior to the sale.  However, the successor owner will not be liable for the back premiums if the successor owner notifies the department of the purchase of the business and the department does not issue a notice of assessment against the business within 60 days.

To collect outstanding industrial insurance premiums, the department may issue a notice to any person, business, or government agency, to withhold and deliver property that belongs to the business owing the premiums.  The notice must be served by the county sheriff's department or by the director's authorized representative.

Because employers pay industrial insurance premiums on a quarterly basis, the Department of Labor and Industries may not know whether a business has overdue premiums before the current 60 day notice period expires.  It is also expensive and slow to require personal service of the notices that the department sends out in collection actions.

SUMMARY:

If a successor owner acquires a business owing industrial insurance premiums, the Department of Labor and Industries must issue a premium assessment against the business within 120 days, rather than 60 days, from the receipt of notice from the successor owner.

In addition to personal service, certified mail with an affidavit of service may be used to serve notices to withhold and deliver a business's property for industrial insurance premium collection purposes.

Appropriation:    none

Revenue:    none

Fiscal Note:      none requested

Senate Committee - Testified: Bob McCallister, Department of Labor and Industries (pro); Clif Finch, AWB; Melanie Stewart