Z-305                 _______________________________________________

                                                   HOUSE BILL NO. 1577

                        _______________________________________________

State of Washington                               51st Legislature                              1989 Regular Session

By Representatives R. Fisher, McLean, Holland, Silver, H. Sommers, Anderson and Winsley; by request of Office of Financial Management

Read first time 1/30/89 and referred to Committees on State Government/Appropriations (3/1/89).

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

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:

          (1) Upon termination, dissolution, or abandonment of a corporate business, any officer or other person having control or supervision of state trust funds or who is charged with the responsibility for the filing of trust fund reports or the remittance of trust funds to the state shall be personally liable for any unpaid trust funds and interest and penalties on those trust funds, if such officer or other person wilfully fails to pay or to cause to be paid any trust funds due from the corporation.

          For the purposes of this section, "trust funds" means all moneys 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.

          For the purposes of this subsection, "wilfully 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.

          For the purposes of this subsection, the employee's share of workers' compensation contributions is considered to be a trust fund collected from the employee whether actually collected from the employee or paid by the employer.

          (2) The officer or other person shall be liable only for trust funds collected which became due during the period he or she had the control, supervision, responsibility, or duty to act for the corporation described in subsection (1) of this section, plus interest and penalties on those trust funds.

          (3) Persons liable under subsection (1) of this section are exempt from liability in situations where nonpayment of the trust funds is due to reasons beyond their control as determined by the applicable department by rule.

          (4) Any person having been issued a notice of assessment under this section is entitled to any appeal procedures available under the applicable statutes.  If no appeal procedures are available under the applicable statutes, appeals may be made under the provisions of chapter 34.05 RCW, the Administrative Procedure Act.

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

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

          (7) Collection authority and procedures governing each type of trust fund apply to collections under this section.   If the applicable statues do not provide for collection authority, the authority and procedures outlined in RCW 82.32.210 and 82.32.220 through 82.32.245 may be used by the agency upon termination of applicable appeal procedures.