H-2136              _______________________________________________

                                          SUBSTITUTE HOUSE BILL NO. 1577

                        _______________________________________________

State of Washington                               51st Legislature                              1989 Regular Session

By House Committee on State Government (originally sponsored by Representatives R. Fisher, McLean, Holland, Silver, H. Sommers, Anderson and Winsley; by request of Office of Financial Management)

Read first time 3/1/89 and referred to Committee on Appropriations.

AN ACT Relating to state trust fund accountability; adding a new section to Title 43 RCW; and creating a new section.

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

NEW SECTION. Sec. 1.  A new section is added to Title 43 RCW to read as follows:

          Upon termination, dissolution, or abandonment of a corporate business, any officer or other person who has control or supervision of state trust funds or who is charged with the responsibility for the remittance of trust funds to a state agency shall be personally liable to the agency for any unpaid trust funds, if such officer or other person willfully fails to pay or to cause to be paid any trust funds due from the corporation.  If any other law specifies interest or penalties for the nonpayment of the trust funds for which the officer or other person is liable, then the officer or person also shall be liable for the amount of the interest and penalties.

          (2) For the purposes of this section:  (a) "Trust funds" means  all moneys which (i) have been collected from another party on behalf of the state, including but not limited to workers' compensation fund contributions collected from employees and the state share of vehicle emission testing fees collected from vehicle owners; and (ii) became due during the period in which the officer or other person had the control, supervision, responsibility, or duty to act for the corporation with respect to the payment of the funds collected on behalf of the state; and (b) "willfully fails to pay or to cause to be paid" means that the failure was the result of an intentional, conscious, and voluntary course of action and that the nonpayment was not caused by reasons beyond the control of the officer or other person.

          For the purposes of this subsection, the employees' share of workers' compensation contributions is considered to be "collected from employees" whether or not the employer actually collected such contributions from the employees.

          (3) This section applies only in situations where the agency has determined that there is no reasonable means of collecting the trust funds directly from the corporation.

          (4) This section does not relieve the corporation of other liabilities or otherwise impair other remedies afforded by law.

          (5) Amounts due to an agency under this section shall be collected in conformance with any statute or administrative law dealing with the collection of such amounts by that agency.  In the absence of such a statute or administrative law, the agency may bring legal action to collect the amounts due or may use the collection authority and procedures available to the department of revenue under RCW 82.32.210 and 82.32.220 through 82.32.245, as if it were the department of revenue and the amounts due were tax payments due.

          (6) This section does not apply to any debt for which any officer or person is liable under RCW 82.32.145.

NEW SECTION. Sec. 2.     This act applies only to trust funds that become due on or after the effective date of this act.