BILL REQ. #:  H-4862.2 

READ FIRST TIME 02/03/06.   

     AN ACT Relating to improving unemployment insurance collection and penalty tools; amending RCW 50.12.220; adding a new section to chapter 50.36 RCW; creating a new section; and recodifying RCW 50.12.220.

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

Sec. 1   RCW 50.12.220 and 2004 c 97 s 1 are each amended to read as follows:
     (1)(a) If an employer fails to file ((in)) a timely ((and complete manner a)) report as required by RCW 50.12.070, or the rules adopted pursuant thereto, the employer ((shall be)) is subject to a penalty ((to be determined by the commissioner, but not to exceed two hundred fifty dollars or ten percent of the quarterly contributions for each such offense, whichever is less)) of twenty-five dollars per violation, unless the penalty is waived by the commissioner.
     (b) An employer who files an incomplete or incorrectly formatted tax and wage report as required by RCW 50.12.070 shall receive a warning letter for the first occurrence. Except as provided in (c) of this subsection, for subsequent occurrences, the employer is subject to a penalty as follows:
     (i) When no contributions are due: For the second occurrence, the penalty is seventy-five dollars; for the third occurrence, the penalty is one hundred fifty dollars; and for the fourth occurrence and for each occurrence thereafter, the penalty is two hundred fifty dollars.
     (ii) When contributions are due: For the second occurrence, the penalty is ten percent of the quarterly contributions due, but not less than seventy-five dollars nor more than two hundred fifty dollars; for the third occurrence, the penalty is ten percent of the quarterly contributions due, but not less than one hundred fifty dollars nor more than two hundred fifty dollars; and for the fourth occurrence and each occurrence thereafter, the penalty is two hundred fifty dollars.
     (c) An employer who files an incomplete or incorrectly formatted tax and wage report as required by RCW 50.12.070 more than five times within any five consecutive calendar years is subject to a penalty as provided in this subsection (1)(c) if the commissioner finds that the filing of the incomplete or incorrectly formatted report was willful. In such a case, the penalty shall be five hundred dollars for the sixth occurrence. The penalty for each subsequent occurrence found to be willful within that period shall be twice the penalty incurred for the immediately preceding occurrence.
     (2) If an employer knowingly misrepresents to the employment security department the amount of his or her payroll upon which contributions under this title are based, the employer shall be liable to the state for up to ten times the amount of the difference in contributions paid, if any, and the amount the employer should have paid and for the reasonable expenses of auditing his or her books and collecting such sums. Such liability may be enforced in the name of the department.
     (((c) If any part of a delinquency for which an assessment is made under this title is due to an intent to evade the successorship provisions of RCW 50.29.062, then for the calendar year in which the commissioner makes the determination under this subsection, the commissioner shall assign to the employer, and to any business found to be promoting the evasion of such provisions, the contribution rate determined for that calendar year under RCW 50.29.025, including the solvency surcharge, if any, for rate class 20 or rate class 40, as applicable, plus two percent.
     (2))) (3) If contributions are not paid on the date on which they are due and payable as prescribed by the commissioner, there shall be assessed a penalty of five percent of the amount of the contributions for the first month or part thereof of delinquency; there shall be assessed a total penalty of ten percent of the amount of the contributions for the second month or part thereof of delinquency; and there shall be assessed a total penalty of twenty percent of the amount of the contributions for the third month or part thereof of delinquency. No penalty so added shall be less than ten dollars. These penalties are in addition to the interest charges assessed under RCW 50.24.040.
     (((3))) (4) Penalties shall not accrue on contributions from an estate in the hands of a receiver, executor, administrator, trustee in bankruptcy, common law assignee, or other liquidating officer subsequent to the date when such receiver, executor, administrator, trustee in bankruptcy, common law assignee, or other liquidating officer qualifies as such, but contributions accruing with respect to employment of persons by a receiver, executor, administrator, trustee in bankruptcy, common law assignee, or other liquidating officer shall become due and shall be subject to penalties in the same manner as contributions due from other employers.
     (((4))) (5) Where adequate information has been furnished to the department and the department has failed to act or has advised the employer of no liability or inability to decide the issue, penalties shall be waived by the commissioner. Penalties may also be waived for good cause if the commissioner determines that the failure to ((timely)) file timely and complete reports or pay contributions was not due to the employer's fault.
     (((5))) (6) Any decision to assess a penalty as provided by this section shall be made by the chief administrative officer of the tax branch or his or her designee.
     (((6))) (7) Nothing in this section shall be construed to deny an employer the right to appeal the assessment of any penalty. Such appeal shall be made in the manner provided in RCW 50.32.030.

NEW SECTION.  Sec. 2   RCW 50.12.220 is recodified as a section in chapter 50.36 RCW.

NEW SECTION.  Sec. 3   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. 4   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.