CERTIFICATION OF ENROLLMENT

SECOND SUBSTITUTE HOUSE BILL 2603

Chapter 194, Laws of 2010

61st Legislature 2010 Regular

Session

SMALL BUSINESSES--NOTICE OF VIOLATIONS

EFFECTIVE DATE: 06/10/10

Passed by

the House March

6, 2010 Yeas 94 Nays

0

FRANK CHOPP Speaker of

the House of

Representatives

Passed by

the Senate March

4, 2010 Yeas 48 Nays

0

BRAD OWEN President of

the Senate CERTIFICATE

I, Barbara Baker, Chief Clerk of the House of Representatives of the State of Washington, do hereby certify that the attached is SECOND SUBSTITUTE HOUSE BILL 2603 as passed by the House of Representatives and the Senate on the dates

hereon set forth.

BARBARA BAKER Chief Clerk

Approved March

24, 2010, 1:53

p.m.

CHRISTINE GREGOIRE Governor of

the State of

Washington FILED March 24, 2010

Secretary of

State State of

Washington_____________________________________________ SECOND SUBSTITUTE HOUSE BILL 2603

_____________________________________________

AS AMENDED

BY THE SENATE Passed Legislature - 2010 Regular

Session

State of

Washington 61st Legislature 2010 Regular Session

By House Ways & Means (originally sponsored by Representatives Smith, Kenney, Bailey, Quall, Morris, Blake, Anderson, Chase, Kelley, Short, Appleton, Sullivan, Dammeier, Upthegrove, Klippert, Chandler, Kristiansen, Rolfes, Pearson, Roach, Parker, Morrell, Haler, Walsh, Orcutt, Johnson, Liias, Hunt, Probst, Ericksen, Moeller, Kretz, Sells, Hope, Herrera, and Warnick)

READ FIRST

TIME 02/09/10.

1 AN ACT Relating to violations of state law or agency rule by small 2 businesses; and amending RCW 34.05.110.

3 BE IT

ENACTED BY THE

LEGISLATURE OF THE STATE OF WASHINGTON:

4 Sec. 1. RCW 34.05.110 and 2009 c 358 s 1 are each amended to read 5 as follows: 6 (1) Agencies must provide to a small business a copy of the state 7 law or agency rule that a small business is violating and a period of 8 at least two business days to correct the violation before the agency 9 may impose any fines, civil penalties, or administrative sanctions for 10 a violation of a state law or agency rule by a small business. If no 11 correction is possible or if an agency is acting in response to a 12 complaint made by a third party and the third party would be 13 disadvantaged by the application of this subsection, the requirements 14 in this

subsection do not apply. 15 (2) Except as provided in subsection (( (3) )) (4) of this section, 16 agencies shall waive any fines, civil penalties, or administrative 17 sanctions for first-time paperwork violations by a small business. 18 (( (2) )) (3) When an agency waives a fine, penalty, or sanction 19 under this section, when possible it shall require the small business

p. 1 2SHB 2603.SL1 to correct the violation within a reasonable period of time, in a 2 manner specified by the agency. If correction is impossible, no 3 correction may be required and failure to correct is not grounds for 4 reinstatement of fines, penalties, or sanctions under subsection 5 (( (4) )) (5) (b) of this section. 6 (( (3) )) (4) Exceptions to requirements of subsection (1) of this 7 section and the waiver requirement in subsection (2) of this section 8 may be

made for any

of the following reasons: 9 (a) The agency head determines that the effect of the violation or 10 waiver presents a direct danger

to the

public health, results in a loss 11 of income or benefits to an employee, poses a potentially significant 12 threat to human health or the environment, or causes serious harm to 13 the public

interest; 14 (b) The violation involves a (( small business knowingly or 15 willfully engaging in conduct that may result in a felony conviction )) 16 knowing or

willful violation ; 17 (c) The violation is of a requirement concerning the assessment, 18 collection, or administration of any tax, tax program, debt, revenue, 19 receipt, a regulated entity's financial filings, or insurance rate or 20 form filing; 21 (d) The (( waiver is )) requirements of this section are in conflict 22 with federal law or program requirements, federal requirements that are 23 a prescribed condition to the allocation of federal funds to the state, 24 or the requirements for eligibility of employers in this state for 25 federal unemployment tax credits, as

determined by the agency head; 26 (e) The

small business committing the violation previously violated 27 a substantially similar (( paperwork )) requirement; or 28 (f) The owner or operator of the small business committing the 29 violation owns or operates, or owned or operated a different small 30 business which previously violated a substantially similar 31 (( paperwork )) requirement. 32 (( (4) )) (5) (a) Nothing in this section prohibits an agency from 33 waiving fines, civil penalties, or administrative sanctions incurred by 34 a small business for a paperwork violation that is not a first-time 35 offense. 36 (b) Any fine, civil penalty, or administrative sanction that is 37 waived under this section may be reinstated and imposed in addition to 38 any additional fines, penalties, or administrative sanctions associated

2SHB 2603.SL p. 21 with a subsequent violation for noncompliance with a substantially 2 similar paperwork requirement, or failure to correct the previous 3 violation as required by the agency under subsection (( (2) )) (3) of 4 this section. 5 (( (5) )) (6) Nothing in this section may be construed to diminish 6 the responsibility for any citizen or business to apply for and obtain 7 a permit, license, or authorizing document that is required to engage 8 in a

regulated activity, or otherwise comply with state or federal law. 9 (( (6) )) (7) Nothing in this section shall be construed to apply to 10 small businesses required to provide accurate and complete information 11 and documentation in relation to any claim for payment of state or 12 federal funds or who are licensed or certified to provide care and 13 services to

vulnerable adults or children. 14 (( (7) )) (8) Nothing in this section affects the attorney general's 15 authority to

impose fines, civil penalties, or administrative sanctions 16 as otherwise authorized by law; nor shall this section affect the 17 attorney general's authority to enforce the consumer protection act, 18 chapter 19.86 RCW. 19 (9) As used in this section: 20 (a) "Small business" means a business with two hundred fifty or 21 fewer employees or a gross revenue of less than seven million dollars 22 annually as reported on its most recent federal income tax return or 23 its most

recent return filed with the department of revenue . 24 (b) "Paperwork violation" means the violation of any statutory or 25 regulatory requirement that mandates the collection of information by 26 an agency, or the collection, posting, or retention of information by 27 a small business. This includes but is not limited to requirements in 28 the Revised

Code of Washington, the Washington Administrative Code, the 29 Washington State Register, or any other agency directive. 30 (c) "First-time paperwork violation" means the first instance of a 31 particular or substantially similar paperwork violation. Passed by

the House March

6, 2010. Passed by

the Senate March 4, 2010. Approved by

the Governor March 24, 2010. Filed in

Office of Secretary of State March

24, 2010.

p. 3 2SHB 2603.SL