HB 2255 -
By Representative Conway
WITHDRAWN 04/01/2005
Strike everything after the enacting clause and insert the following:
"NEW SECTION. Sec. 1 The legislature finds that the unemployment
insurance system was created to set aside unemployment reserves to be
used for the benefit of persons who are unemployed through no fault of
their own and to maintain purchasing power and limit the social
consequences of unemployment. The legislature further finds that the
system is falling short of these goals by failing to recognize the
importance of applying liberal construction for the purpose of reducing
involuntary unemployment, and the suffering caused by it, to the
minimum, and by failing to provide equitable benefits to unemployed
workers. The legislature also recognizes the desirability of managing
the system to take into account the goal of reducing costs to foster a
competitive business climate. The legislature intends to adjust the
balance between these goals by reinstating the requirement for liberal
construction and making other adjustments in the system that will allow
reasonable improvements in benefit equity, including reinstating a
weekly benefit calculation based on the wages in the two quarters of
the claimant's base year in which wages were the highest. The
legislature finds that these adjustments are critical to the health and
welfare of unemployed workers, and to the purchasing power essential to
the economic health and welfare of communities and the state, and
should be implemented as soon as feasible.
NEW SECTION. Sec. 2 The sum of two hundred fifty thousand
dollars, or as much thereof as may be necessary, is appropriated for
the fiscal biennium ending June 30, 2007, from the unemployment
compensation administration account--federal appropriation from the
moneys made available to the state by section 903(d) of the social
security act (reed act) for (1) establishing the additional capacity of
two full-time equivalent employees within the employment security
department to develop economic models for estimating the impacts of
policy changes on the unemployment insurance system and the
unemployment trust fund and (2) contracting with an independent third-party expert to review these economic models.
Sec. 3 RCW 50.01.010 and 2003 2nd sp.s. c 4 s 1 are each amended
to read as follows:
Whereas, economic insecurity due to unemployment is a serious
menace to the health, morals and welfare of the people of this state;
involuntary unemployment is, therefore, a subject of general interest
and concern which requires appropriate action by the legislature to
prevent its spread and to lighten its burden which now so often falls
with crushing force upon the unemployed worker and his family. Social
security requires protection against this greatest hazard of our
economic life. This can be provided only by application of the
insurance principle of sharing the risks, and by the systematic
accumulation of funds during periods of employment to provide benefits
for periods of unemployment, thus maintaining purchasing powers and
limiting the serious social consequences of relief assistance. The
state of Washington, therefore, exercising herein its police and
sovereign power endeavors by this title to remedy any widespread
unemployment situation which may occur and to set up safeguards to
prevent its recurrence in the years to come. The legislature,
therefore, declares that in its considered judgment the public good,
and the general welfare of the citizens of this state require the
enactment of this measure, under the police powers of the state, for
the compulsory setting aside of unemployment reserves to be used for
the benefit of persons unemployed through no fault of their own, and
that this title shall be liberally construed for the purpose of
reducing involuntary unemployment and the suffering caused thereby to
the minimum.
Sec. 4 RCW 50.20.120 and 2003 2nd sp.s. c 4 s 11 are each amended
to read as follows:
(1)(a) 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, as determined in subsection (2) of this
section, or one-third of the individual's base year wages under this
title: PROVIDED, That as to any week which falls in an extended
benefit period as defined in RCW 50.22.010(1), 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.
(b) With respect to claims that have an effective date on or after
the first Sunday of the calendar month immediately following the month
in which the commissioner finds that the state unemployment rate is six
and eight-tenths percent or less, benefits shall be payable to any
eligible individual during the individual's benefit year in a maximum
amount equal to the lesser of twenty-six times the weekly benefit
amount, as determined in subsection (2) of this section, or one-third
of the individual's base year wages under this title.
(2)(a) For claims with an effective date before January 4, 2004, 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) With respect to claims with an effective date on or after
January 4, 2004, and before January 2, 2005, 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
three quarters of the individual's base year in which such total wages
were highest.
(c) With respect to claims with an effective date on or after
January 2, 2005, and before July 3, 2005, an individual's weekly
benefit amount shall be an amount equal to one percent of the total
wages paid in the individual's base year.
(d) With respect to claims with an effective date on or after July
3, 2005, an individual's weekly benefit amount shall be an amount equal
to three and eighty-five one-hundredths percent 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.
(3) 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.
(a)(i) With respect to claims that have an effective date before
January 4, 2004, the maximum amount payable weekly shall be seventy
percent of the "average weekly wage" for the calendar year preceding
such June 30th.
(ii) With respect to claims that have an effective date on or after
January 4, 2004, the maximum amount payable weekly shall be either four
hundred ninety-six dollars or sixty-three percent of the "average
weekly wage" for the calendar year preceding such June 30th, whichever
is greater.
(b) The minimum amount payable weekly shall be fifteen percent of
the "average weekly wage" for the calendar year preceding such June
30th.
(4) 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.
Sec. 5 RCW 50.29.025 and 2003 2nd sp.s. c 4 s 14 are each amended
to read as follows:
(1) Except as provided in subsection (2) of this section, the
contribution rate for each employer subject to contributions under RCW
50.24.010 shall be determined under this subsection.
(a) A fund balance ratio shall be determined by dividing the
balance in the unemployment compensation fund as of the September 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.
(b) The interval of the fund balance ratio, expressed as a
percentage, shall determine which tax schedule in (e) of this
subsection 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 Expressed as a Percentage | Effective Tax Schedule | |
2.90 and above | AA | |
2.10 to 2.89 | A | |
1.70 to 2.09 | B | |
1.40 to 1.69 | C | |
1.00 to 1.39 | D | |
0.70 to 0.99 | E | |
Less than 0.70 | F |
Percent of Cumulative Taxable Payrolls | Schedules of Contributions Rates for Effective Tax Schedule | |||||||||
From | To | Rate Class | AA | A | B | C | D | E | F | |
0.00 | 5.00 | 1 | 0.47 | 0.47 | 0.57 | 0.97 | 1.47 | 1.87 | 2.47 | |
5.01 | 10.00 | 2 | 0.47 | 0.47 | 0.77 | 1.17 | 1.67 | 2.07 | 2.67 | |
10.01 | 15.00 | 3 | 0.57 | 0.57 | 0.97 | 1.37 | 1.77 | 2.27 | 2.87 | |
15.01 | 20.00 | 4 | 0.57 | 0.73 | 1.11 | 1.51 | 1.90 | 2.40 | 2.98 | |
20.01 | 25.00 | 5 | 0.72 | 0.92 | 1.30 | 1.70 | 2.09 | 2.59 | 3.08 | |
25.01 | 30.00 | 6 | 0.91 | 1.11 | 1.49 | 1.89 | 2.29 | 2.69 | 3.18 | |
30.01 | 35.00 | 7 | 1.00 | 1.29 | 1.69 | 2.08 | 2.48 | 2.88 | 3.27 | |
35.01 | 40.00 | 8 | 1.19 | 1.48 | 1.88 | 2.27 | 2.67 | 3.07 | 3.47 | |
40.01 | 45.00 | 9 | 1.37 | 1.67 | 2.07 | 2.47 | 2.87 | 3.27 | 3.66 | |
45.01 | 50.00 | 10 | 1.56 | 1.86 | 2.26 | 2.66 | 3.06 | 3.46 | 3.86 | |
50.01 | 55.00 | 11 | 1.84 | 2.14 | 2.45 | 2.85 | 3.25 | 3.66 | 3.95 | |
55.01 | 60.00 | 12 | 2.03 | 2.33 | 2.64 | 3.04 | 3.44 | 3.85 | 4.15 | |
60.01 | 65.00 | 13 | 2.22 | 2.52 | 2.83 | 3.23 | 3.64 | 4.04 | 4.34 | |
65.01 | 70.00 | 14 | 2.40 | 2.71 | 3.02 | 3.43 | 3.83 | 4.24 | 4.54 | |
70.01 | 75.00 | 15 | 2.68 | 2.90 | 3.21 | 3.62 | 4.02 | 4.43 | 4.63 | |
75.01 | 80.00 | 16 | 2.87 | 3.09 | 3.42 | 3.81 | 4.22 | 4.53 | 4.73 | |
80.01 | 85.00 | 17 | 3.27 | 3.47 | 3.77 | 4.17 | 4.57 | 4.87 | 4.97 | |
85.01 | 90.00 | 18 | 3.67 | 3.87 | 4.17 | 4.57 | 4.87 | 4.97 | 5.17 | |
90.01 | 95.00 | 19 | 4.07 | 4.27 | 4.57 | 4.97 | 5.07 | 5.17 | 5.37 | |
95.01 | 100.00 | 20 | 5.40 | 5.40 | 5.40 | 5.40 | 5.40 | 5.40 | 5.40 |
Benefit Ratio | Rate Class | Rate (percent) | |
At least | Less than | ||
0.000001 | 1 | 0.00 | |
0.000001 | 0.001250 | 2 | 0.13 |
0.001250 | 0.002500 | 3 | 0.25 |
0.002500 | 0.003750 | 4 | 0.38 |
0.003750 | 0.005000 | 5 | 0.50 |
0.005000 | 0.006250 | 6 | 0.63 |
0.006250 | 0.007500 | 7 | 0.75 |
0.007500 | 0.008750 | 8 | 0.88 |
0.008750 | 0.010000 | 9 | 1.00 |
0.010000 | 0.011250 | 10 | 1.15 |
0.011250 | 0.012500 | 11 | 1.30 |
0.012500 | 0.013750 | 12 | 1.45 |
0.013750 | 0.015000 | 13 | 1.60 |
0.015000 | 0.016250 | 14 | 1.75 |
0.016250 | 0.017500 | 15 | 1.90 |
0.017500 | 0.018750 | 16 | 2.05 |
0.018750 | 0.020000 | 17 | 2.20 |
0.020000 | 0.021250 | 18 | 2.35 |
0.021250 | 0.022500 | 19 | 2.50 |
0.022500 | 0.023750 | 20 | 2.65 |
0.023750 | 0.025000 | 21 | 2.80 |
0.025000 | 0.026250 | 22 | 2.95 |
0.026250 | 0.027500 | 23 | 3.10 |
0.027500 | 0.028750 | 24 | 3.25 |
0.028750 | 0.030000 | 25 | 3.40 |
0.030000 | 0.031250 | 26 | 3.55 |
0.031250 | 0.032500 | 27 | 3.70 |
0.032500 | 0.033750 | 28 | 3.85 |
0.033750 | 0.035000 | 29 | 4.00 |
0.035000 | 0.036250 | 30 | 4.15 |
0.036250 | 0.037500 | 31 | 4.30 |
0.037500 | 0.040000 | 32 | 4.45 |
0.040000 | 0.042500 | 33 | 4.60 |
0.042500 | 0.045000 | 34 | 4.75 |
0.045000 | 0.047500 | 35 | 4.90 |
0.047500 | 0.050000 | 36 | 5.05 |
0.050000 | 0.052500 | 37 | 5.20 |
0.052500 | 0.055000 | 38 | 5.30 |
0.055000 | 0.057500 | 39 | 5.35 |
0.057500 | 40 | 5.40 |
Sec. 6 RCW 50.16.030 and 1999 c 36 s 1 are each amended to read
as follows:
(1)(a) Except as provided in (b) and (c) of this subsection, moneys
shall be requisitioned from this state's account in the unemployment
trust fund solely for the payment of benefits and repayment of loans
from the federal government to guarantee solvency of the unemployment
compensation fund in accordance with regulations prescribed by the
commissioner, except that money credited to this state's account
pursuant to section 903 of the social security act, as amended, shall
be used exclusively as provided in RCW 50.16.030(5). The commissioner
shall from time to time requisition from the unemployment trust fund
such amounts, not exceeding the amounts standing to its account
therein, as he or she deems necessary for the payment of benefits for
a reasonable future period. Upon receipt thereof the treasurer shall
deposit such moneys in the benefit account and shall issue his or her
warrants for the payment of benefits solely from such benefits account.
(b) During fiscal years 2006 and 2007, moneys for the payment of
regular benefits as defined in RCW 50.22.010 shall be requisitioned in
the following order:
(i) First, from the moneys credited to this state's account in the
unemployment trust fund pursuant to section 903 of the social security
act, as amended in section 209 of the temporary extended unemployment
compensation act of 2002 (42 U.S.C. Sec. 1103(d)), the amount equal to
the amount of benefits charged that exceed the contributions paid in
the four consecutive calendar quarters ending on June 30, 2006, for the
fiscal year 2006 calculation, and ending on June 30, 2007, for the
fiscal year 2007 calculation, because the social cost factor
contributions that employers are subject to under RCW
50.29.025(2)(b)(ii)(B)(I) are less than the social cost factor
contributions that would have applied to these employers under RCW
50.29.025(2)(b)(ii)(B)(II); and
(ii) Second, after the requisitioning required under (b)(i) of this
subsection in the respective fiscal year, from all other moneys
credited to this state's account in the unemployment trust fund.
(c) After the requisitioning required under (b) of this subsection,
if applicable, during calendar years 2006 through 2009, moneys for the
payment of regular benefits as defined in RCW 50.22.010 shall be
requisitioned in the following order:
(i) First, from the moneys credited to this state's account in the
unemployment trust fund pursuant to section 903 of the social security
act, as amended in section 209 of the temporary extended unemployment
compensation act of 2002 (42 U.S.C. Sec. 1103(d)), the amount equal to
the amount of benefits charged that exceed the contributions paid in
the four consecutive calendar quarters immediately preceding the
applicable computation date because the social cost factor
contributions paid pursuant to RCW 50.29.025(2)(b)(i)(D)(II) are less
than the social cost factor contributions that would have been paid if
RCW 50.29.025(2)(b)(i)(D)(I) had been applicable; and
(ii) Second, after the requisitioning required under (c)(i) of this
subsection in the respective calendar year, from all other moneys
credited to this state's account in the unemployment trust fund.
(2) Expenditures of such moneys in the benefit account and refunds
from the clearing account shall not be subject to any provisions of law
requiring specific appropriations or other formal release by state
officers of money in their custody, and RCW 43.01.050, as amended,
shall not apply. All warrants issued by the treasurer for the payment
of benefits and refunds shall bear the signature of the treasurer and
the countersignature of the commissioner, or his or her duly authorized
agent for that purpose.
(3) Any balance of moneys requisitioned from the unemployment trust
fund which remains unclaimed or unpaid in the benefit account after the
expiration of the period for which sums were requisitioned shall either
be deducted from estimates for, and may be utilized for the payment of,
benefits during succeeding periods, or in the discretion of the
commissioner, shall be redeposited with the secretary of the treasury
of the United States of America to the credit of this state's account
in the unemployment trust fund.
(4) Money credited to the account of this state in the unemployment
trust fund by the secretary of the treasury of the United States of
America pursuant to section 903 of the social security act, as amended,
may be requisitioned and used for the payment of expenses incurred for
the administration of this title pursuant to a specific appropriation
by the legislature, provided that the expenses are incurred and the
money is requisitioned after the enactment of an appropriation law
which:
(a) Specifies the purposes for which such money is appropriated and
the amounts appropriated therefor;
(b) Limits the period within which such money may be obligated to
a period ending not more than two years after the date of the enactment
of the appropriation law; and
(c) Limits the amount which may be obligated during a twelve-month
period beginning on July 1st and ending on the next June 30th to an
amount which does not exceed the amount by which (i) the aggregate of
the amounts credited to the account of this state pursuant to section
903 of the social security act, as amended, during the same twelve-month period and the thirty-four preceding twelve-month periods,
exceeds (ii) the aggregate of the amounts obligated pursuant to RCW
50.16.030 (4), (5) and (6) and charged against the amounts credited to
the account of this state during any of such thirty-five twelve-month
periods. For the purposes of RCW 50.16.030 (4), (5) and (6), amounts
obligated during any such twelve-month period shall be charged against
equivalent amounts which were first credited and which are not already
so charged; except that no amount obligated for administration during
any such twelve-month period may be charged against any amount credited
during such a twelve-month period earlier than the thirty-fourth
twelve-month period preceding such period: PROVIDED, That any amount
credited to this state's account under section 903 of the social
security act, as amended, which has been appropriated for expenses of
administration, whether or not withdrawn from the trust fund shall be
excluded from the unemployment compensation fund balance for the
purpose of experience rating credit determination.
(5) Money credited to the account of this state pursuant to section
903 of the social security act, as amended, may not be withdrawn or
used except for the payment of benefits and for the payment of expenses
of administration and of public employment offices pursuant to RCW
50.16.030 (4), (5) and (6). However, moneys credited because of excess
amounts in federal accounts in federal fiscal years 1999, 2000, and
2001 shall be used solely for the administration of the unemployment
compensation program and are not subject to appropriation by the
legislature for any other purpose.
(6) Money requisitioned as provided in RCW 50.16.030 (4), (5) and
(6) for the payment of expenses of administration shall be deposited in
the unemployment compensation fund, but until expended, shall remain a
part of the unemployment compensation fund. The commissioner shall
maintain a separate record of the deposit, obligation, expenditure and
return of funds so deposited. Any money so deposited which either will
not be obligated within the period specified by the appropriation law
or remains unobligated at the end of the period, and any money which
has been obligated within the period but will not be expended, shall be
returned promptly to the account of this state in the unemployment
trust fund.
NEW SECTION. Sec. 7 A new section is added to chapter 50.29 RCW
to read as follows:
(1) Beginning October 1, 2006, and each October 1st thereafter
through October 1, 2009, the employment security department must report
to the appropriate committees of the legislature on the impact, or
projected impact, of sections 3 and 4, chapter ..., Laws of 2005
(sections 3 and 4 of this act) on the unemployment trust fund in the
three consecutive fiscal years beginning with the year before the
report date.
(2) This section expires January 1, 2010.
NEW SECTION. Sec. 8 (1)(a) The joint legislative task force on
unemployment insurance benefit equity is established. The joint
legislative task force shall consist of the following members:
(i) The chair and ranking minority member of the senate labor,
commerce, research and development committee;
(ii) The chair and ranking minority member of the house commerce
and labor committee;
(iii) Four members representing business, selected from nominations
submitted by statewide business organizations representing a cross-section of industries and appointed jointly by the president of the
senate and the speaker of the house of representatives; and
(iv) Four members representing labor, selected from nominations
submitted by statewide labor organizations representing a cross-section
of industries and appointed jointly by the president of the senate and
the speaker of the house of representatives.
(b) In addition, the employment security department shall cooperate
with the task force and maintain a liaison representative, who shall be
a nonvoting member. The department shall cooperate with the task force
and provide information as the task force may reasonably request.
(2) The task force shall review the unemployment insurance system,
including, but not limited to, whether the benefit structure provides
for equitable benefits, whether the structure fairly accounts for
changes in the work force and industry work patterns, and for
claimants' annual work patterns, whether the tax structure provides for
an equitable distribution of taxes, and whether the trust fund is
adequate in the long term.
(3)(a) The task force shall use legislative facilities, and staff
support shall be provided by senate committee services and the house of
representatives office of program research. The task force may hire
additional staff with specific technical expertise if such expertise is
necessary to carry out the mandates of this study.
(b) Legislative members of the task force shall be reimbursed for
travel expenses in accordance with RCW 44.04.120. Nonlegislative
members, except those representing an employer or organization, are
entitled to be reimbursed for travel expenses in accordance with RCW
43.03.050 and 43.03.060.
(c) The expenses of the task force shall be paid jointly by the
senate and the house of representatives.
(5) The task force shall report its findings and recommendations to
the legislature by January 1, 2006.
(6) This section expires July 1, 2006.
NEW SECTION. Sec. 9 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. 10 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."
Correct the title.
EFFECT: The amendment strikes the underlying intent section and
adds provisions that:
(1) Appropriate $250,000 from Reed Act funds to establish
additional capacity in the Employment Security Department to develop
economic models and contract with an outside expert to evaluate the
models.
(2) Restore the "liberal construction" requirement for interpreting
the unemployment insurance system.
(3) For unemployment benefits paid on claims with effective dates
on or after July 3, 2005, calculate weekly benefit amounts (WBA) using
3.85 percent of the claimant's average wages during the two quarters in
which the wages were highest, instead of using one percent of annual
wages.
(4) For fiscal years 2006 and 2007, require employers in the
following industry classification to pay a graduated social cost factor
rate of zero: Agricultural crops, livestock, agricultural services,
food processing (fresh and frozen), and packing houses/cold storage.
Reed Act funds are requisitioned to pay benefits in the amount of the
benefits that are not effectively charged because of the difference in
contributions that would have been paid at the usual rate.
(5) For tax years 2006 through 2009, require the flat social cost
factor to be the lesser of the rate applicable with the new WBA
calculations in effect and the rate that would have been applicable if
the WBA had been calculated as one percent of annual wages. When
benefits are not effectively charged because the rate used is the rate
under the "one percent of annual wages" calculation, Reed Act funds are
requisitioned to pay benefits in the amount of those ineffective
charges.
(6) Adjust the formula for determining the social cost factor in
rate years 2007 through 2009 each year to account for any benefits that
are not effectively charged under the changes during fiscal years 2006
through 2009.
(7) Require the Employment Security Department to report to the
Legislature annually for four years, beginning October 1, 2006, on the
impact of these changes on the unemployment trust fund, with each
report covering three consecutive fiscal years, beginning with the
fiscal year prior to the report.
(8) Establish the Joint Legislative Task Force on Unemployment
Insurance Benefit Equity with four business representatives, four labor
representatives, and the chairs and ranking minority members of the
Senate Labor, Commerce, Research & Development Committee, and the House
Commerce & Labor Committee, respectively. The Task Force must review
the system, including whether the benefit structure is equitable,
whether the structure fairly accounts for changes in work force,
industry, and claimant work patterns, whether the tax structure
equitably distributes taxes, and whether the trust fund is adequate in
the long term.
(9) Declare an emergency with an immediate effective date.