Bill Text: MI HB4390 | 2011-2012 | 96th Legislature | Introduced

---

Bill Title: Employment security; other; payment method for unemployment tax; modify. Amends secs. 13 & 15 of 1936 (Ex Sess) PA 1 (MCL 421.13 & 421.15) & adds sec. 15a.

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2011-03-09 - Printed Bill Filed 03/09/2011 [HB4390 Detail]

Download: Michigan-2011-HB4390-Introduced.html

---

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 4390

March 8, 2011, Introduced by Reps. Stamas, Denby, Roy Schmidt, Haveman, Walsh, Horn, Lyons, Melton, Tlaib and Barnett and referred to the Committee on Commerce.

 

     A bill to amend 1936 (Ex Sess) PA 1, entitled

 

"Michigan employment security act,"

 

by amending sections 13 and 15 (MCL 421.13 and 421.15), section 13

 

as amended by 1985 PA 197 and section 15 as amended by 1996 PA 498,

 

and by adding section 15a.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 13. (1) Each employer subject to this act shall pay to

 

the commission a tax in the form of payments in lieu of

 

contributions where the employer is liable for those payments, or

 

tax contributions equal to a standard rate of 2.7% for calendar

 

years before 1985 and either payments for which the employer is

 

liable as an eligible reimbursing employer or contributions at the

 

rate required of a contributing employer. A contributing employer

 

shall pay at the rate of 5.4% for calendar year 1985 and

 

thereafter, subject to an adjustment in rate of contributions

 

adjusted as provided in section 19. The Except as otherwise

 

provided in subsection (3), the contributions shall become due and

 

be paid to the commission, for the unemployment compensation fund ,

 

are due and payable by each employer semiannually, or for shorter

 

periods of not less than 28 days, as the commission may prescribes

 

by rule. prescribe. An employer's contribution shall not be

 

deducted directly or indirectly, in whole or in part, from wages of

 

individuals in his or her employ. In the payment of contributions,

 

a fractional part of a cent shall be disregarded unless it amounts

 

to 1/2 cent or more, in which case it shall be increased to 1

 

rounded to the nearest cent. The commission may prescribe by rule

 

the details of the computation and payment of contributions. Every

 

employing unit shall file with the commission periodic reports on

 

forms and at a time as the commission shall prescribe prescribes to

 

disclose liability for contributions under this act. Each employing

 

unit shall keep records, including wage and employment records, and

 

shall, within prescribed time limits, submit or provide reports,

 

including wage and employment reports, to the commission or to the

 

employing unit's employees or former employees as the commission

 

may by rule prescribe as necessary to carry out this act as

 

prescribed by rule.

 

     (2) Beginning with the first quarter of 1986, each employer

 

shall file a quarterly wage report with the commission, on forms

 

and at a time as that the commission shall prescribe prescribes,

 

which shall include for each of the employer's employees the

 

employee's name, social security number, and gross wages paid

 

during each the quarter, and the name, address, and federal and

 

state employer identification number of the individual's employer.

 

     (3) The unemployment agency shall allow a contributing

 

employer that incurred 50% or more of the employer's total previous

 

year's contribution obligation in the first quarter of that year to

 

discharge the liability for contributions due in the next

 

succeeding year through quarterly payments that distribute the

 

payment of the first quarter's obligation equally over the 4

 

quarters in that year. To avoid interest and penalties otherwise

 

applicable to those payments, an employer meeting the requirements

 

of this subsection shall notify the agency of the election to make

 

apportioned payments with the first quarter's payment and timely

 

file each succeeding quarterly payment in the amounts prescribed in

 

section 15a.

 

     Sec. 15. (a) Contributions Except as provided in section 15a,

 

contributions unpaid on the date on which they are due and payable,

 

as prescribed by the commission, shall bear interest at the rate of

 

equivalent to 1% per month , computed on a day to day basis for

 

each day the delinquency is unpaid, from and after that date until

 

the commission receives the payment plus accrued interest. is

 

received by the commission. Amounts illegally obtained or

 

previously withheld from payment and damages that are recovered by

 

the commission under section 54(a) and (b) and sections 54a to 54c

 

of this act shall bear interest at the a rate of equivalent to 1%

 

per month , computed on a day-to-day basis for each day the amounts

 

plus accrued interest remain unpaid. until payment plus accrued

 

interest is received by the commission. The interest on unpaid

 

contributions, exclusive of penalties, shall not exceed 50% of the

 

amount of contributions due at the due date. Interest and penalties

 

collected pursuant to this section shall be paid into the

 

contingent fund. The commission may cancel any interest and any or

 

penalty when it is shown that if the failure to pay on or before

 

the last day on which the tax could have been paid without interest

 

and penalty was not the result of negligence, intentional disregard

 

of the rules of the commission, or fraud.

 

     (b) The commission may make assessments against an employer,

 

claimant, employee of the commission, or third party who fails to

 

pay contributions, reimbursement payments in lieu of contributions,

 

penalties, forfeitures, or interest as required by this act. The

 

commission shall immediately notify the employer, claimant,

 

employee of the commission, or third party of the assessment in

 

writing by first-class mail. An assessment by the commission

 

against a claimant, an employee of the commission, or a third party

 

under this subsection shall be made only for penalties and interest

 

on those penalties for violations of section 54(a) or (b) or

 

sections 54a to 54c. The assessment, which shall constitute a

 

determination, shall be final unless the employer, claimant,

 

employee of the commission, or third party files with the

 

commission an application for a redetermination of the assessment

 

is filed in accordance with section 32a. A review by the commission

 

or an appeal to a referee or the appeal board on the assessment

 

shall does not reopen a question concerning an employer's liability

 

for contributions or reimbursement payments in lieu of

 

contributions, unless the employer was not a party to the

 

proceeding or decision where at which the basis for the assessment

 

was determined. An employer may pay an assessment under protest and

 

file an action to recover the amount paid as provided under

 

subsection (d). Unless an assessment is paid within 15 days after

 

it becomes final, the commission may issue a warrant under its

 

official seal for the collection of an the amount required to be

 

paid pursuant to of the assessment. The After a warrant is issued,

 

the commission through its authorized employees, under a warrant

 

issued, may levy upon and sell the property of the employer that is

 

within this state and used in connection with the employer's

 

business , or that is subject to a notice to withhold, found within

 

the state, for the payment of the amount of the contributions

 

including penalties, interests, and the cost of executing the

 

warrant. Property of the employer used in connection with the

 

employer's business shall is not be exempt from levy under the

 

warrant. Wages subject to a notice to withhold shall be are exempt

 

to the extent the wages are exempt from garnishment. under the laws

 

of this state. The warrant shall be returned to the commission

 

together with the money collected by virtue of under the warrant

 

within the time specified in the warrant, which shall not be less

 

than 20 or more than 90 days after the date of the warrant issue.

 

The commission shall proceed upon the warrant in all respects and

 

with like effect and in the same manner as prescribed by law in

 

respect to for executions issued against property upon judgments by

 

a court of record. The state, through the commission or some other

 

its designated officer or agent, designated by it, may bid for and

 

purchase property sold under the provisions of this subsection. If

 

an employer, claimant, employee of the commission, or third party ,

 

as applicable, is delinquent in the payment of a contribution,

 

reimbursement payment in lieu of contribution, penalty, forfeiture,

 

or interest provided for in this act, the commission may give serve

 

notice of with the amount of the delinquency served either

 

personally or by mail , to a person or legal entity, including the

 

state and its subdivisions, that has is in possession or under

 

control of a credit or other intangible property belonging to the

 

employer, claimant, employee of the commission, or third delinquent

 

party, or who owes a debt to the employer, claimant, employee of

 

the commission, or third delinquent party at the time of the

 

receipt of the notice is received. A person or legal entity so

 

notified shall not transfer or make a disposition dispose of the

 

credit, other intangible property, or debt without retaining an

 

amount sufficient to pay the amount specified in the notice unless

 

the commission consents to a transfer or disposition or 45 days

 

have elapsed from the after receipt of the notice. A person or

 

legal entity so notified shall advise the commission within 5 days

 

after receipt of the notice of a the credit, other intangible

 

property, or debt , which that is in its possession , under its or

 

control. , or owed by it. A person or legal entity that is notified

 

and that transfers or disposes of credits or personal property in

 

violation of this section is liable to the commission for the value

 

of the property or the amount of the debts thus transferred or

 

paid, but not more than the amount specified in the notice. An The

 

amount due a delinquent employer, claimant, employee of the

 

commission, or third party subject to indicated in a notice to

 

withhold of delinquency shall be paid to the commission upon

 

service upon the debtor of a warrant issued under this section.

 

     (c) In addition to the mode of collection provided in

 

subsection (b), if, after due notice, an employer defaults in

 

payment of contributions or interest on the contributions, or a

 

claimant, employee of the commission, or third party defaults in

 

the payment of a penalty or interest on a penalty, the commission

 

may bring an action at law in a court of competent jurisdiction to

 

collect and recover the amount of a contribution, and any interest

 

on the contribution, or the penalty or interest on the penalty, and

 

in addition 10% of the amount of contributions or penalties found

 

to be due, as damages. An employer, claimant, employee of the

 

commission, or third party adjudged in default shall pay costs of

 

the action. An action by the commission against a claimant,

 

employee of the commission, or third party under this subsection

 

shall be brought only to recover penalties and interest on those

 

penalties for violations of section 54(a) or (b) or sections 54a to

 

54c. Civil actions brought under this section subsection shall be

 

heard by the court at the earliest possible date. If a judgment is

 

obtained against an employer for contributions and an execution on

 

that judgment is returned unsatisfied, the employer may be enjoined

 

from operating and doing business in this state until the judgment

 

is satisfied. The circuit court of for the county in which the

 

judgment is docketed or the circuit court for the county of Ingham

 

may grant an injunction upon the petition of the commission. A copy

 

of the petition for injunction and a notice of when and where the

 

court shall act on the petition shall be served on the employer at

 

least 21 days before the court may grant the injunction.

 

     (d) An employer or employing unit improperly charged or

 

assessed contributions provided for under this act or a claimant,

 

employee of the commission, or third party improperly assessed a

 

penalty under this act and who paid the contributions or penalty

 

under protest within 30 days after the mailing of the notice of

 

determination of assessment, may recover the amount improperly

 

collected or paid, together with interest, in any proper action

 

against the commission. The circuit court of for the county in

 

which the employer or employing unit or claimant, employee of the

 

commission, or third party resides , or , in the case of an

 

employer or employing unit, in which is located the principal

 

office or place of business of the employer or employing unit is

 

located, shall have original jurisdiction of over an action to

 

recover contributions improperly paid or collected or a penalty

 

improperly assessed, whether or not the charge or assessment has

 

been reviewed by the commission or heard or reviewed by a referee

 

or the appeal board. The court shall not have jurisdiction of over

 

the action unless written notice of claim is given to the

 

commission at least 30 days before the institution of the action.

 

In an action to recover contributions paid or collected or

 

penalties assessed, the court shall allow costs to such an extent

 

and in a manner as it may consider considers proper. Either party

 

to the action shall have the right of may appeal , as is now

 

provided by law , in for other civil actions. An action by a

 

claimant, employee of the commission, or third party against the

 

commission under this subsection shall be brought only to recover

 

penalties and interest on those penalties improperly assessed by

 

the commission under section 54(a) or (b) or sections 54a to 54c.

 

If a final judgment is rendered in favor of the plaintiff in an

 

action to recover the amount of contributions illegally collected

 

or charged, the The treasurer of the commission, upon receipt of a

 

certified copy of the final judgment, shall pay the amount of

 

contributions illegally collected or charged or penalties assessed

 

the judgment from the clearing account, and pay interest as may be

 

allowed by the court , in an amount not to that does not exceed the

 

actual earnings of the on those contributions as may have been

 

found to have been illegally collected or charged, from the

 

contingent fund.

 

     (e) Except for liens and encumbrances recorded before the

 

filing of the notice provided for in this section, all delinquent

 

contributions, interest, and penalties payable under this act to

 

the commission from an employer, claimant, employee of the

 

commission, or third party that neglects to pay the same when due

 

shall be a become first and prior lien liens upon all property and

 

rights to property, real and personal, belonging to of the

 

employer, claimant, employee of the commission, or third party. The

 

lien shall continue continues until the liability for that amount

 

or a judgment arising out of the liability is satisfied or becomes

 

unenforceable by reason of lapse of time. The lien shall attach

 

attaches to the property and rights to property, of the employer,

 

claimant, employee of the commission, or third party, whether real

 

or personal, from and after as of the required filing date that a

 

for the report upon which the specific tax is computed. is required

 

by this act to be filed. Notice of the lien shall be recorded in

 

the office of the register of deeds of the county in which the

 

property subject to the lien is situated. , and the register of

 

deeds shall receive the notice for recording. This subsection shall

 

apply only to penalties and interest on those penalties assessed by

 

the commission against a claimant, employee of the commission, or

 

third party for violations of section 54(a) or (b) or sections 54a

 

to 54c. As to a claimant, employee of the commission, or third

 

party, this subsection applies only to liens arising from penalties

 

and interest on those penalties assessed by the commission for

 

violation of section 54(a) or (b) or sections 54a to 54c.

 

     If there is a distribution of an employer's assets pursuant to

 

an order of a court under the laws of this state, including a

 

receivership, assignment for benefit of creditors, adjudicated

 

insolvency, composition, or similar proceedings, contributions then

 

or thereafter due shall be paid in full before all other claims

 

except for wages and compensation under the worker's disability

 

compensation act of 1969, Act No. 317 of the Public Acts of 1969,

 

being sections 418.101 to 418.941 of the Michigan Compiled Laws

 

1969 PA 317, MCL 418.101 to 418.941. In the distribution of estates

 

of decedents, claims for funeral expenses and expenses of last

 

sickness shall also be entitled to priority.

 

     (f) An injunction shall not issue to stay proceedings for

 

assessment or collection of contributions, or interest or penalty

 

on contributions, levied and required by this act.

 

     (g) A person or employing unit , that acquires the

 

organization, trade, business, or 75% or more of the assets from an

 

employing unit, as a successor defined described in section 41(2),

 

is liable for contributions and interest due to the commission from

 

the transferor at the time of the acquisition in an amount not to

 

exceed the reasonable value of the organization, trade, business,

 

or assets acquired, less the amount of a secured interest in the

 

assets owned by the transferee that are entitled to priority. The

 

transferor or transferee who has, not less than 10 days before the

 

acquisition, requested from the commission in writing a statement

 

certifying the status of contribution liability of the transferor

 

shall be provided with that statement and the transferee is not

 

liable for any amount due from the transferor in excess of the

 

amount of liability computed as prescribed in this subsection and

 

certified by the commission. At least 2 calendar days not including

 

a Saturday, Sunday, or legal holiday before the acceptance of an

 

offer, the transferor, or the transferor's real estate broker or

 

other agent representing the transferor, shall disclose to the

 

transferee on a form provided by the commission, the amounts of the

 

transferor's outstanding unemployment tax liability, unreported

 

unemployment tax liability, and the tax payments, tax rates, and

 

cumulative benefit charges for the most recent 5 years, a listing

 

of all individuals currently employed by the transferor, and a

 

listing of all employees separated from employment with the

 

transferor in the most recent 12 months. This form shall specify

 

such other information, as determined by the commission, as would

 

be required for a transferee to estimate future unemployment

 

compensation costs, based on the transferor's benefit charge and

 

tax reporting and payment experience with the commission. Failure

 

of the transferor, or the transferor's real estate broker or other

 

agent representing the transferor, to provide accurate information

 

required by this subsection is a misdemeanor punishable by

 

imprisonment for not more than 90 days, or a fine of not more than

 

$2,500.00, or both. In addition, the transferor, or the

 

transferor's real estate broker or other agent representing the

 

transferor, is liable to the transferee for any consequential

 

damages resulting from the failure to comply with this subsection.

 

However, the real estate broker or other agent is not liable for

 

consequential damages if he or she exercised good faith in

 

compliance with the disclosure of information. The remedy provided

 

the transferee is not exclusive, and is not to be construed to

 

reduce any other right or remedy against any party provided for in

 

this or any other act. Nothing in this subsection shall be

 

construed to decrease the liability of the transferee as a

 

successor in interest, or to prevent the transfer of a rating

 

account balance as provided in this act. The foregoing provisions

 

are in addition to the remedies the commission has against the

 

transferor.

 

     (h) If a part of a deficiency in payment of the employer's

 

contribution to the unemployment compensation fund is due to

 

negligence or intentional disregard of the rules of the commission,

 

but without intention to defraud, 5% of the total amount of the

 

deficiency, in addition to the deficiency and in addition to all

 

other interest charges and penalties provided herein, shall be

 

assessed, collected, and paid in the same manner as if it were a

 

deficiency. If a part of a deficiency is determined in an action at

 

law to be due to fraud with intent to avoid payment of

 

contributions to the fund, then the judgment rendered shall include

 

an amount equal to 50% of the total amount of the deficiency, in

 

addition to the deficiency and in addition to all other interest

 

charges and penalties provided herein.

 

     (i) If an employing unit fails to make a report as reasonably

 

required by the rules of the commission pursuant to this act, the

 

commission may make an estimate of the liability of that employing

 

unit from information it may obtain obtains and, according to that

 

estimate, so made, assess the employing unit for the contributions,

 

penalties, and interest due. The commission shall have the power

 

may make an estimate under this subsection only after a default

 

continues for 30 days and after the commission has determined that

 

the default of the employing unit is willful.

 

     (j) An assessment or penalty with respect to contributions

 

unpaid is not effective as to unpaid contributions for any period

 

before the more than 3 calendar years preceding before the date of

 

the assessment.

 

     (k) The rights respecting the collection of procedures for

 

collecting contributions and the levy of levying interest, and

 

penalties, and damages made available to the commission by under

 

this section is additional to supplement other powers and rights

 

vested in the commission in pursuance of the by other provisions of

 

this act. The commission is not precluded from exercising may

 

exercise any of the collection remedies provided for by under this

 

act even though an application for a redetermination or an appeal

 

is pending final disposition.

 

     (l) A person recording a lien provided for in under this

 

section shall pay a fee of $2.00 for recording a lien and a fee of

 

$2.00 for recording a discharge of a lien.

 

     Sec. 15a. (1) The unemployment agency shall not collect

 

interest on a contribution obligation that an employer pays through

 

apportioned quarterly payments, if the employer meets the

 

requirements of section 13(3) and has remitted the following

 

amounts or more each quarter by the date established for each

 

quarterly filing:

 

     (a) First quarter - 25% of the total obligation incurred in

 

the first quarter.

 

     (b) Second quarter - The obligation incurred in the second

 

quarter plus 25% of the total obligation for the first quarter.

 

     (c) Third quarter - The obligation incurred in the third

 

quarter plus 25% of the total obligation for the first quarter.

 

     (d) Fourth quarter - The obligation incurred in the fourth

 

quarter plus 25% of the total obligation for the first quarter.

 

     (2) The agency may collect interest at the rate specified in

 

section 15 on the amount unpaid if the apportioned payments do not

 

meet or exceed the percentages prescribed in subsection (1).