S-2134.1 _______________________________________________
SUBSTITUTE SENATE BILL 5860
_______________________________________________
State of Washington 53rd Legislature 1993 Regular Session
By Senate Committee on Labor & Commerce (originally sponsored by Senators Moore, Newhouse and Vognild)
Read first time 03/03/93.
AN ACT Relating to the financing of unemployment insurance; amending RCW 50.29.025 and 50.24.014; and creating a new section.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1. RCW 50.29.025 and 1990 c 245 s 7 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:
Interval of the
Fund Balance Ratio Effective
Expressed as a Percentage Tax Schedule
3.90 and above AA
3.40 ((and above)) to
3.89 A
2.90 to 3.39 B
2.40 to 2.89 C
1.90 to 2.39 D
1.40 to 1.89 E
Less than 1.40 F
(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:
((Percent of
Cumulative Schedule
of Contribution Rates for
Taxable Payrolls
Effective Tax Schedule
Rate
From To Class A B C D
E F
0.00 5.00 1 0.48
0.58 0.98 1.48 1.88 2.48
5.01 10.00 2 0.48
0.78 1.18 1.68 2.08 2.68
10.01 15.00 3 0.58
0.98 1.38 1.78 2.28 2.88
15.01 20.00 4 0.78
1.18 1.58 1.98 2.48 3.08
20.01 25.00 5 0.98
1.38 1.78 2.18 2.68 3.18
25.01 30.00 6 1.18
1.58 1.98 2.38 2.78 3.28
30.01 35.00 7 1.38
1.78 2.18 2.58 2.98 3.38
35.01 40.00 8 1.58
1.98 2.38 2.78 3.18 3.58
40.01 45.00 9 1.78
2.18 2.58 2.98 3.38 3.78
45.01 50.00 10 1.98
2.38 2.78 3.18 3.58 3.98
50.01 55.00 11 2.28
2.58 2.98 3.38 3.78 4.08
55.01 60.00 12 2.48
2.78 3.18 3.58 3.98 4.28
60.01 65.00 13 2.68
2.98 3.38 3.78 4.18 4.48
65.01 70.00 14 2.88
3.18 3.58 3.98 4.38 4.68
70.01 75.00 15 3.08
3.38 3.78 4.18 4.58 4.78
75.01 80.00 16 3.28
3.58 3.98 4.38 4.68 4.88
80.01 85.00 17 3.48
3.78 4.18 4.58 4.88 4.98
85.01 90.00 18 3.88
4.18 4.58 4.88 4.98 5.18
90.01 95.00 19 4.28
4.58 4.98 5.08 5.18 5.38
95.01 100.00 20 5.40
5.40 5.40 5.40 5.40 5.40))
Percent of
Cumulative Schedule of Contribution Rates for
Taxable Payrolls Effective Tax Schedule
Rate
From To Class AA A B C
0.00 5.00 1 0.465 0.465 0.565 0.965
5.01 10.00 2 0.465 0.465 0.765 1.165
10.01 15.00 3 0.465 0.565 0.965 1.365
15.01 20.00 4 0.565 0.765 1.165 1.565
20.01 25.00 5 0.765 0.965 1.365 1.765
25.01 30.00 6 0.965 1.165 1.565 1.965
30.01 35.00 7 1.065 1.365 1.765 2.165
35.01 40.00 8 1.265 1.565 1.965 2.365
40.01 45.00 9 1.465 1.765 2.165 2.565
45.01 50.00 10 1.665 1.965 2.365 2.765
50.01 55.00 11 1.965 2.265 2.565 2.965
55.01 60.00 12 2.165 2.465 2.765 3.165
60.01 65.00 13 2.365 2.665 2.965 3.365
65.01 70.00 14 2.565 2.865 3.165 3.565
70.01 75.00 15 2.865 3.065 3.365 3.765
75.01 80.00 16 3.065 3.265 3.565 3.965
80.01 85.00 17 3.265 3.465 3.765 4.165
85.01 90.00 18 3.665 3.865 4.165 4.565
90.01 95.00 19 4.065 4.265 4.565 4.965
95.01 100.00 20 5.400 5.400 5.400 5.400
Percent of
Cumulative Schedule of Contribution Rates for
Taxable Payrolls Effective Tax Schedule
Rate
From To Class D E F
0.00 5.00 1 1.465 1.865 2.465
5.01 10.00 2 1.665 2.065 2.665
10.01 15.00 3 1.765 2.265 2.865
15.01 20.00 4 1.965 2.465 3.065
20.01 25.00 5 2.165 2.665 3.165
25.01 30.00 6 2.365 2.765 3.265
30.01 35.00 7 2.565 2.965 3.365
35.01 40.00 8 2.765 3.165 3.565
40.01 45.00 9 2.965 3.365 3.765
45.01 50.00 10 3.165 3.565 3.965
50.01 55.00 11 3.365 3.765 4.065
55.01 60.00 12 3.565 3.965 4.265
60.01 65.00 13 3.765 4.165 4.465
65.01 70.00 14 3.965 4.365 4.665
70.01 75.00 15 4.165 4.565 4.765
75.01 80.00 16 4.365 4.665 4.865
80.01 85.00 17 4.565 4.865 4.965
85.01 90.00 18 4.865 4.965 5.165
90.01 95.00 19 5.065 5.165 5.365
95.01 100.00 20 5.400 5.400 5.400
(6) The contribution rate for each employer not qualified to be in the array shall be 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, except employers who have an approved agency-deferred payment contract by September 30 of the previous rate year. If any employer with an approved agency-deferred payment contract fails to make any one of the succeeding deferred payments or fails to submit any succeeding tax report and payment in a timely manner, the employer's tax rate shall immediately revert to five and four-tenths percent for the current rate year;
(b) The contribution rate for employers exempt as of December 31, 1989, who are newly covered under the section 78, chapter 380, Laws of 1989 amendment to RCW 50.04.150 and not yet qualified to be in the array shall be 2.5 percent for employers whose standard industrial code is "013", "016", "017", "018", "019", "021", or "081"; 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.
Sec. 2. RCW 50.24.014 and 1987 c 171 s 4 are each amended to read as follows:
A separate and identifiable account to provide
for the financing of special programs to assist the unemployed is established
in the administrative contingency fund. Contributions to this account shall
accrue and become payable by each employer, except employers as described in
RCW 50.44.010 and 50.44.030 who have properly elected to make payments in lieu
of contributions, taxable local government employers as described in RCW
50.44.035, and those employers who are required to make payments in lieu of
contributions, at ((the)) a basic rate of two one-hundredths of
one percent. The amount of wages subject to tax shall be determined under RCW
50.24.010.
Beginning with rate year 1994, this basic rate of two one-hundredths of one percent shall be increased by fifteen one-thousandths of one percent to a total rate of thirty-five one-thousandths of one percent. The proceeds of this incremental fifteen one-thousandths of one percent rate shall be used solely to support the processing and payment of unemployment insurance claims.
Contributions under this section shall become due and be paid by each employer under rules as the commissioner may prescribe, and shall not be deducted, in whole or in part, from the remuneration of individuals in the employ of the employer. Any deduction in violation of this section is unlawful.
In the payment of any contributions under this section, a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to one cent.
If the commissioner determines that federal funding has been increased to provide financing for the services specified in chapter 50.62 RCW, the commissioner shall direct that collection of contributions under this section be terminated on the following January 1st.
If the commissioner determines that federal funding has been increased to provide adequate financing for the processing and payment of unemployment insurance claims, the commissioner shall direct that collection of the incremental fifteen one-thousandths of one percent be terminated on the following January 1st.
NEW SECTION. Sec. 3. (1) There is hereby created a joint task force on unemployment insurance composed of the following members:
(a) Four members of the senate labor and commerce committee, two from each of the major caucuses, to be appointed by the president of the senate;
(b) Four members of the house of representatives commerce and labor committee, two from each of the major caucuses, to be appointed by the speaker of the house of representatives; and
(c) Up to eight members appointed jointly by the president of the senate and the speaker of the house of representatives representing business and labor in equal numbers. The business representatives shall be selected from nominations submitted by state-wide business organizations representing a cross-section of industries. The labor representatives shall be selected from nominations submitted by state-wide labor organizations representing a cross-section of industries.
(2) The employment security department unemployment insurance advisory committee shall act as an advisory body to the task force.
(3) The senate committee services and the office of program research shall provide the staff support as mutually agreed by the cochairs of the task force. The task force shall designate the cochairs.
(4) The members of the task force shall be reimbursed for travel expenses as provided in RCW 43.03.050 and 43.03.060.
(5) The task force shall study the following issues:
(a) Benefit financing and administration of unemployment insurance;
(b) Social costs;
(c) Administrative costs;
(d) Experience rating systems;
(e) Tax rates;
(f) Trust fund adequacy;
(g) Accountability and administrative funding of employment security department programs; and
(h) Any other issues deemed appropriate by the task force.
(6) The task force shall report its findings to the legislature by December 31, 1993.
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