BP BHEAD INT H [atlas:bill]

AN ACT Relating to freezing unemployment insurance benefits and contributions; amending RCW 50.24.010, 50.29.025, and 50.20.120; creating new sections; providing an expiration date; and declaring an emergency.

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

Sec. 1. RCW 50.24.010 and 1984 c 205 s 2 are each amended to read as follows:

Contributions shall accrue and become payable by each employer (except employers as described in RCW 50.44.010 who have properly elected to make payments in lieu of contributions and those employers who are required to make payments in lieu of contributions) for each calendar year in which the employer is subject to this title at the rate established pursuant to chapter 50.29 RCW.

In each rate year, the amount of wages subject to tax for each individual shall be one hundred fifteen percent of the amount of wages subject to tax for the previous year rounded to the next lower one hundred dollars((~~: PROVIDED~~)), except that the amount of wages subject to tax in any rate year shall not exceed eighty percent of the "average annual wage for contributions purposes" for the second preceding calendar year rounded to the next lower one hundred dollars((~~: PROVIDED FURTHER, That~~)). However, the amount subject to tax shall be ((~~twelve~~)) twenty-four thousand three hundred dollars for rate ((~~year 1984 and ten thousand dollars for rate year 1985~~)) year 2000, and the first calendar quarter of rate year 2001.

In making computations under this section and RCW 50.29.010, wages paid based on services for employers making payments in lieu of contributions shall not be considered remuneration. Moneys paid from the fund, based on services performed for employers who make payments in lieu of contributions, which have not been reimbursed to the fund as of any June 30 shall be deemed an asset of the unemployment compensation fund, to the extent that such moneys exceed the amount of payments in lieu of contributions which the commissioner has previously determined to be uncollectible: PROVIDED, FURTHER, That the amount attributable to employment with the state shall also include interest as provided for in RCW 50.44.020.

Contributions shall become due and be paid by each employer to the treasurer for the unemployment compensation fund in accordance with such regulations as the commissioner may prescribe, and shall not be deducted, in whole or in part, from the remuneration of individuals in employment of the employer. Any deduction in violation of the provisions of this section shall be unlawful.

In the payment of any contributions, 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.

Sec. 2. RCW 50.29.025 and 1995 c 4 s 2 are each amended to read as follows:

The contribution rate for each employer subject to contributions under RCW 50.24.010 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, except that during rate year 2000, and the first calendar quarter of rate year 2001, tax schedule A shall be in effect. The intervals for determining the effective tax schedule shall be:

Interval of the

Fund Balance Ratio Effective

Expressed as a Percentage Tax Schedule

2.90 and above AA

2.50 to 2.89 A

2.10 to 2.49 B

1.70 to 2.09 C

1.30 to 1.69 D

1.00 to 1.29 E

Less than 1.00 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) Except as provided in RCW 50.29.026, the contribution rate for each employer in the array shall be the rate specified in the following tables 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 Schedules of Contributions Rates

Taxable Payrolls for Effective Tax Schedule

Rate

From To Class AA A B C D E F

0.00 5.00 1 0.48 0.48 0.58 0.98 1.48 1.88 2.48

5.01 10.00 2 0.48 0.48 0.78 1.18 1.68 2.08 2.68

10.01 15.00 3 0.58 0.58 0.98 1.38 1.78 2.28 2.88

15.01 20.00 4 0.58 0.78 1.18 1.58 1.98 2.48 3.08

20.01 25.00 5 0.78 0.98 1.38 1.78 2.18 2.68 3.18

25.01 30.00 6 0.98 1.18 1.58 1.98 2.38 2.78 3.28

30.01 35.00 7 1.08 1.38 1.78 2.18 2.58 2.98 3.38

35.01 40.00 8 1.28 1.58 1.98 2.38 2.78 3.18 3.58

40.01 45.00 9 1.48 1.78 2.18 2.58 2.98 3.38 3.78

45.01 50.00 10 1.68 1.98 2.38 2.78 3.18 3.58 3.98

50.01 55.00 11 1.98 2.28 2.58 2.98 3.38 3.78 4.08

55.01 60.00 12 2.18 2.48 2.78 3.18 3.58 3.98 4.28

60.01 65.00 13 2.38 2.68 2.98 3.38 3.78 4.18 4.48

65.01 70.00 14 2.58 2.88 3.18 3.58 3.98 4.38 4.68

70.01 75.00 15 2.88 3.08 3.38 3.78 4.18 4.58 4.78

75.01 80.00 16 3.08 3.28 3.58 3.98 4.38 4.68 4.88

80.01 85.00 17 3.28 3.48 3.78 4.18 4.58 4.88 4.98

85.01 90.00 18 3.68 3.88 4.18 4.58 4.88 4.98 5.18

90.01 95.00 19 4.08 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 5.40

(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~~)) a contribution rate ((~~of five and six-tenths percent~~)) two-tenths higher than that in rate class 20 for the applicable rate year, 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 six-tenths percent for the current~~)) a contribution rate two-tenths higher than that in rate class 20 for the applicable rate year; and

(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~~)) section, 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, or as found in a successor code recognized by the commissioner.

Sec. 3. RCW 50.20.120 and 1993 c 483 s 12 are each amended to read as follows:

(1) Subject to the other provisions of this title, benefits shall be payable to any eligible individual during the individual's benefit year in a maximum amount equal to the lesser of thirty times the weekly benefit amount (determined hereinafter) or one-third of the individual's base year wages under this title: PROVIDED, That as to any week beginning on and after March 31, 1981, which falls in an extended benefit period as defined in RCW 50.22.010(1), ((~~as now or hereafter amended,~~)) an individual's eligibility for maximum benefits in excess of twenty-six times his or her weekly benefit amount will be subject to the terms and conditions set forth in RCW 50.22.020((~~, as now or hereafter amended~~)).

(2)(a) An individual's weekly benefit amount shall be an amount equal to one twenty-fifth of the average quarterly wages of the individual's total wages during the two quarters of the individual's base year in which such total wages were highest.

(b) The maximum and minimum amounts payable weekly shall be determined as of each June 30th to apply to benefit years beginning in the twelve-month period immediately following such June 30th. Except as otherwise provided in this subsection: (i) The maximum amount payable weekly shall be seventy percent of the "average weekly wage" for the calendar year preceding such June 30th((.)); and (ii) the minimum amount payable weekly shall be fifteen percent of the "average weekly wage" for the calendar year preceding such June 30th. For benefit years beginning after June 30, 2000, but before April 1, 2001, the maximum and minimum amounts payable weekly shall be the amounts determined as of June 30, 1999. For benefit years beginning on or after April 1, 2001, but before July 1, 2001, the maximum and minimum amounts payable weekly shall be the amounts determined as of June 30, 2000.

(c) If any weekly benefit, maximum benefit, or minimum benefit amount computed herein is not a multiple of one dollar, it shall be reduced to the next lower multiple of one dollar.

NEW SECTION. Sec. 4. (1) A legislative task force is established to undertake a comprehensive review of unemployment insurance benefits and contributions, including the impact of the benefits and contributions freeze under RCW 50.24.010, 50.29.025, and 50.20.120. The task force shall consist of nine members as follows:

(a) One member from each of the two largest caucuses of the senate, appointed by the president of the senate;

(b) One member from each of the two largest caucuses of the house of representatives, appointed by the co-speakers of the house of representatives;

(c) Two members representing business, one representing seasonal businesses and one representing nonseasonal businesses, and two members representing labor, appointed jointly by the president of the senate and the co-speakers of the house of representatives; and

(d) One member representing the governor, appointed by the governor.

(2) The employment security department shall cooperate with the task force and provide such reasonable technical support as the task force chair may request.

(3) The task force shall use legislative facilities and staff from senate committee services and the office of program research, but may hire additional staff with specific technical expertise if such expertise is necessary to carry out the mandates of this study. Each nonlegislative member of the task force shall be reimbursed for travel expenses in accordance with RCW 43.03.050 and 43.03.060. All expenses of the task force, including travel, shall be paid jointly by the senate and the house of representatives.

(4) The task force shall report its findings and recommendations to the appropriate committees of the legislature by October 1, 2000.

(5) This section expires July 1, 2001.

NEW SECTION. Sec. 5. If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state or the eligibility of employers in this state for federal unemployment tax credits, the conflicting part of this act is inoperative solely to the extent of the conflict, and the finding or determination does not affect the operation of the remainder of this act. Rules adopted under this act must meet federal requirements that are a necessary condition to the receipt of federal funds by the state or the granting of federal unemployment tax credits to employers in this state.

NEW SECTION. Sec. 6. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 7. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.