Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 82.32.300.

Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: This rule explains the circumstances under which a person is considered a successor to a person quitting business. The rule is being amended to reflect changes in the law since it was last amended in 1970. One change is the definition of successor. Another change is the elimination of the requirement to report bulk transfers to the Department of Revenue. The rule is also being amended to reflect the decision in a Court of Appeals case, Palmer v. Washington, 82 Wn. App. 367 (1996), regarding the successor liability of secured creditors who repossess property and then operate the business.

Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: No other agencies are directly affected by this rule.

Process for Developing New Rule: Modified negotiated rule making.

Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication. Written comments may be submitted by mail, FAX, or at the public meeting. Oral comments will be accepted at the public meeting. A preliminary draft of the proposed changes is available upon request. Written comments on and/or requests for copies of the rule may be directed to Greg Potegal, Legislation and Policy, P.O. Box 47467, Olympia, WA 98504-7467, phone (360) 753-1971, FAX (360) 664-0693, e-mail gregp@dor.wa.gov.

Location and Date of Public Meeting: June 24, 1998, 10:00 a.m., Evergreen Plaza Building, 711 Capitol Way, Second Floor Conference Room, Olympia, WA.

Assistance for Persons with Disabilities: Contact Janet Schilter by June 14, 1998, TDD 1-800-451-7985, or (360) 753-7790.

May 19, 1998

Claire Hesselholt

Rules Manager