Bill Text: MI HB5169 | 2017-2018 | 99th Legislature | Introduced
Bill Title: Employment security; other; unpaid restitution of benefit overpayments; modify accrual of interest. Amends sec. 15 of 1936 (Ex Sess) PA 1 (MCL 421.15). TIE BAR WITH: HB 5165'17, HB 5166'17, HB 5167'17, HB 5168'17, HB 5170'17, HB 5171'17, HB 5172'17
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2017-12-28 - Assigned Pa 229'17 With Immediate Effect [HB5169 Detail]
Download: Michigan-2017-HB5169-Introduced.html
HOUSE BILL No. 5169
October 24, 2017, Introduced by Rep. LaFave and referred to the Committee on Oversight.
A bill to amend 1936 (Ex Sess) PA 1, entitled
"Michigan employment security act,"
by amending section 15 (MCL 421.15), as amended by 2016 PA 228.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 15. (a) Contributions unpaid on the date on which they
are due and payable, as prescribed by the unemployment agency, and
unpaid
restitution of benefit overpayments, shall except as
otherwise provided under this subsection, bear interest at the rate
of 1% per month, computed on a day-to-day basis for each day the
delinquency is unpaid, from and after that date until payment plus
accrued interest is received by the unemployment agency. The
interest on unpaid contributions and on unpaid restitution of
benefit
overpayments, exclusive of penalties, shall must not
exceed
50% of the amount of contributions due at due date or 50% of the
amount of restitution owing. Nothing in this act authorizes the
assessment or collection of interest on a penalty imposed under
this
act. Interest and penalties collected pursuant to under this
section
shall must be paid into the contingent fund. The Penalties
collected under this section must be credited pursuant to section
54(k). With regard to contribution payments, the unemployment
agency may cancel any interest and any penalty when it is shown
that 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
unemployment agency, or fraud. All of the following apply to
interest on unpaid restitution of benefit overpayments:
(1) Except as provided in subdivisions (2) and (3), interest
begins accruing 1 year after the date the unemployment agency's
determination or redetermination or an administrative law judge's,
the Michigan compensation appellate commission's, or a court's
order that a claimant owes restitution is final.
(2) The unemployment agency shall not assess interest for
improperly paid benefits that were the result of an administrative
or clerical error made by the unemployment agency. Interest
assessed for improperly paid benefits that is later determined to
have been the result of an administrative or clerical error made by
the unemployment agency must be waived, and any payment made by a
claimant for such interest must be refunded.
(3) If the unemployment agency determines or redetermines or
an administrative law judge, the Michigan compensation appellate
commission, or a court orders that a claimant made an intentional
false statement, misrepresentation, or concealed material
information to obtain or increase benefits, interest begins
accruing on the date the unemployment agency's determination or
redetermination or the order is final.
(b) The unemployment agency may make assessments against an
employer, claimant, employee of the unemployment agency, or third
party who fails to pay contributions, restitution of benefit
overpayments, reimbursement payments in lieu of contributions,
penalties, forfeitures, or interest as required by this act. The
unemployment agency shall immediately notify the employer,
claimant, employee of the unemployment agency, or third party of
the
assessment in writing by first-class mail. An The unemployment
agency
shall not make an assessment by the
unemployment agency
against a claimant, an employee of the unemployment agency, or a
third
party under this subsection shall be made only unless the
assessment
is for penalties a penalty for violations a
violation of
section
54(a) or (b) or sections 54a to 54c. The An assessment made
under this subsection is a final determination unless the employer,
claimant, employee of the unemployment agency, or third party files
with the unemployment agency an application for a redetermination
of
the assessment in accordance with pursuant to section 32a. A
review by the unemployment agency or an appeal to an administrative
law judge or the Michigan compensation appellate commission on the
assessment does not reopen a question concerning an employer's
liability for contributions or reimbursement payments in lieu of
contributions or a claimant's entitlement to benefits, unless the
claimant or employer was not a party to the proceeding or decision
where 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 If an
assessment is not paid within 15 days after it becomes final, the
unemployment agency may issue a warrant under its official seal for
the collection of the assessed amount. The unemployment agency,
through
its authorized employees , and
under a warrant issued, may
place
a lien on any bank account of the a claimant or employer and
may
levy upon and sell the property of the an employer that is used
in connection with the employer's business, or that is subject to a
notice
to withhold, found within the this
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 is not exempt from levy
under the warrant. Wages subject to a notice to withhold are exempt
to the extent the wages are exempt from garnishment under the laws
of
this state. The warrant shall must
be returned to the
unemployment agency together with the money collected under the
warrant
within the time specified in the warrant which shall must
not be less than 20 or more than 90 days after the date of the
warrant. The unemployment agency shall proceed upon the warrant as
prescribed by law in respect to executions issued against property
upon
judgments by a court of record. The This state, through the
unemployment agency or some other officer or agent designated by
it, may bid for and purchase property sold under this subsection.
If an employer, claimant, employee of the unemployment agency, 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
unemployment agency may give notice of the amount of the
delinquency served either personally or by mail, to a person or
legal
entity, including the this
state and its subdivisions, that
has in its possession or under its control a credit or other
intangible property belonging to the employer, claimant, employee
of the unemployment agency, or third party, or who owes a debt to
the employer, claimant, employee of the unemployment agency, or
third party at the time of the receipt of the notice. A person or
legal
entity so that is notified shall not transfer or dispose of
the credit, other intangible property, or debt without retaining an
amount sufficient to pay the amount specified in the notice unless
the unemployment agency consents to a transfer or disposition or 45
days have elapsed from the receipt of the notice. A person or legal
entity
so that is notified shall advise the unemployment agency
within 5 days after receipt of the notice of a credit, other
intangible property, or debt, that is in its possession, under its
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 unemployment agency 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 amount due a delinquent employer, claimant, employee of
the unemployment agency, or third party subject to a notice to
withhold
shall must be paid to the unemployment agency 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 proper notice, an employer defaults
in payment of contributions or interest on the contributions, or a
claimant, employee of the unemployment agency, or third party
defaults
in the payment of a penalty, or interest on a penalty, the
unemployment agency 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 unemployment agency, or third
party
adjudged in default shall pay costs of the action. An The
unemployment
agency shall not bring an action by
the unemployment
agency
against a claimant, employee of the
unemployment agency, or
third
party under this subsection shall be brought only unless the
action
is brought only to recover penalties and
interest on those
penalties
for violations of section 54(a) or
(b) or sections 54a to
54c.
Civil A court shall hear
civil actions brought under this
section
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, a court may
enjoin
the employer may be enjoined from
operating and doing
business in this state until the judgment is satisfied. The circuit
court of the county in which the judgment is docketed, or the
Ingham
County circuit court, for
the county of Ingham may grant an
injunction upon the petition of the unemployment agency. A copy of
the petition for injunction and a notice of when and where the
court
shall act on the petition shall must
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 unemployment agency, 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 unemployment agency. The circuit court of the
county in which the employer or employing unit or claimant,
employee of the unemployment agency, 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, has original jurisdiction of 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 unemployment agency or heard or reviewed by an
administrative law judge or the Michigan compensation appellate
commission.
The court has no does not
have jurisdiction of the
action unless written notice of the claim is given to the
unemployment agency 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 it considers
proper. Either party to the action has the same right of appeal as
provided
by law in other civil actions. An action by a A claimant,
employee of the unemployment agency, or third party shall not bring
an action against the unemployment agency under this subsection
shall
be unless it is brought only to recover penalties and
interest on those penalties improperly assessed by the unemployment
agency 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 treasurer of the unemployment agency, upon receipt of
a certified copy of the final judgment, shall pay the amount of
contributions illegally collected or charged or penalties assessed
from the clearing account, and pay interest as allowed by the
court, in an amount not to exceed the actual earnings of the
contributions as 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
contributions, interest, and penalties payable under this act to
the unemployment agency from an employer, claimant, employee of the
unemployment agency, or third party that neglects to pay the same
when due are a first and prior lien upon all property and rights to
property, real and personal, belonging to the employer, claimant,
employee of the unemployment agency, or third party. The lien
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 attaches to the property and
rights to property of the employer, claimant, employee of the
unemployment agency, or third party, whether real or personal, from
and after the required filing date of the report upon which the
specific
tax is computed. Notice of the lien shall must 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 accept the notice for recording. Notice of the lien
may
also be filed with the secretary of state in accordance with
pursuant to the state tax lien registration act, 1968 PA 203, MCL
211.681 to 211.687. This subsection applies only to penalties and
interest on those penalties assessed by the unemployment agency
against a claimant, employee of the unemployment agency, or third
party for violations 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 must be paid in full before all other
claims except for wages and compensation under the worker's
disability compensation act of 1969, 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 are also entitled to
priority.
(f)
An A court shall not issue
an injunction shall not issue
to stay proceedings for the assessment or collection of
contributions,
a contribution, or interest or penalty on
contributions,
a contribution, 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 described in section 41(2), is liable for
contributions and interest due to the unemployment agency 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
If a transferor or transferee who has, not less than 10 days before
the acquisition, requested from the unemployment agency in writing
a statement certifying the status of contribution liability of the
transferor, the unemployment agency shall be provided provide the
transferor or transferee 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 unemployment agency. 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 unemployment
agency , 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
The
form shall must specify
any other information the unemployment
agency determines is required for a transferee to estimate future
unemployment compensation costs based on the transferor's benefit
charge and unemployment tax reporting and payment experience.
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 does not reduce any other
right or remedy against any party provided for in this or any other
act. Nothing in this subsection decreases the liability of the
transferee as a successor in interest, or prevents the transfer of
a rating account balance as provided in this act. The remedies
under this subsection are in addition to the remedies the
unemployment agency has against the transferor.
(h) If a part of a deficiency in payment of the employer's
contribution to the fund is due to negligence or intentional
disregard of unemployment agency rules, but without intention to
defraud, 5% of the total amount of the deficiency, in addition to
the deficiency and all other interest charges and penalties
provided
herein, shall must be assessed, collected, and paid in the
same manner as a deficiency. If a part of a deficiency is
determined
in an action at law to be due to the result of fraud
with intent to avoid payment of contributions to the fund, then the
judgment
rendered shall must include an amount equal to 50% of the
total amount of the deficiency, in addition to the deficiency and
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 unemployment agency pursuant to this
act, the unemployment agency may estimate the liability of that
employing unit from information it obtains and, according to that
estimate, assess the employing unit for the contributions,
penalties, and interest due. The unemployment agency may act under
this subsection only after a default continues for 30 days and
after the unemployment agency has determined that the default of
the employing unit is willful.
(j) An assessment or penalty with respect to contributions
unpaid is not effective for any period before the 3 calendar years
preceding the date of the assessment.
(k) The rights respecting the collection of contributions and
the levy of interest and penalties and damages made available to
the unemployment agency by this section are additional to other
powers and rights vested in the unemployment agency under other
provisions of this act. The unemployment agency may exercise any of
the collection remedies under this act even though an application
for a redetermination or an appeal is pending final disposition.
(l) A person recording a lien or a discharge of a lien under
this section shall pay to the register of deeds a recording fee
that is equivalent to the fee for entering and recording a mortgage
as authorized under section 2567 of the revised judicature act of
1961, 1961 PA 236, MCL 600.2567.
(m) In addition to the restitution recoupment methods in
section 62, the unemployment agency may obtain restitution due from
a claimant as a result of a benefit overpayment that has become
final by any of the following methods:
(1) Levy of a bank account belonging to the claimant.
(2) Entry into a wage assignment with the claimant.
(3) Issuing an administrative garnishment of the wages of the
claimant.
(n) To obtain an administrative garnishment, the unemployment
agency
shall must notify the claimant of both of the following: the
its intention to issue an administrative garnishment on the
claimant's employer and the amount determined to be due from the
claimant.
The notice shall must include a demand for immediate
payment of the amount due, a statement that it is not subject to
appeal, and a statement that the claimant may, within 30 days of
the issuance of the notice, object to the garnishment by providing
information to the agency, with supporting documentation, that the
claimant does not owe the stated amount of restitution. Not less
than 30 days after issuing the notice to the claimant, the
unemployment agency shall notify the claimant's employer to
withhold from earnings due or to become due from the claimant the
amount shown on the notice plus accrued interest. The employer
shall comply with the notice to withhold and shall continue to
withhold each pay period the amount shown on the notice plus
accrued interest until the garnishment amount plus accrued interest
has been satisfied and the notice is released by the unemployment
agency. The unemployment agency's administrative garnishment has
priority over any subsequent garnishment or wage assignment. The
amount
subject to garnishment for any pay period shall must be
decreased by any other irrevocable and previously effective
assignment of wages or other garnishment action served on the
employer before service of the agency's garnishment notice. The
amount
of the unemployment agency's garnishment shall must not
exceed 25% of the balance. In response to the administrative
garnishment, the employer shall do all of the following:
(1) Within 10 calendar days after the date of the unemployment
agency's notice to withhold wages, notify the unemployment agency
of the amount of any irrevocable and previously effective
assignment of wages or garnishment actions.
(2) Within 10 days after the end of each pay period in which
wages are required to be withheld under the administrative
garnishment, remit to the unemployment agency the amount withheld
pursuant to the administrative garnishment.
(3) Within 10 days after the date on which the claimant ceases
to be employed by the employer, notify the unemployment agency.
(o) Before payment of a prize of $1,000.00 or more under the
McCauley-Traxler-Law-Bowman-McNeeley lottery act, 1972 PA 239, MCL
432.1 to 432.47, the bureau of state lottery shall determine
whether a lottery prize winner has a current liability for
restitution of unemployment benefits, penalty, or interest,
assessed by the unemployment agency and the amount of the prize
owing to the unemployment agency and shall remit that amount to the
unemployment agency.
(p) If the unemployment agency does not record the discharge
of lien with the register of deeds and seek reimbursement for that
recording fee, the unemployment agency shall provide the discharge
of lien document and a notice of lien recording fee to the debtor,
who
will is then be responsible for recording the
discharge and
paying the applicable amounts required under section 2567 of the
revised judicature act of 1961, 1961 PA 236, MCL 600.2567. The
notice
of lien recording fee shall must
state the amount of the
recording fee the unemployment agency paid for recording the lien
that is the subject of the discharge and may include any other
relevant information.
(q) In addition to any other remedy provided under this act,
the unemployment agency may seek to recover unemployment
compensation debt as provided by 26 USC 6402(f), 42 USC 503(m), or
other applicable federal law. The debtor is liable for any fee the
federal government imposes with respect to implementing the
deduction from a federal tax refund.
Enacting section 1. This amendatory act applies to
determinations, redeterminations, and orders made on or after July
1, 2018.
Enacting section 2. This amendatory act does not take effect
unless all of the following bills of the 99th Legislature are
enacted into law:
(a) Senate Bill No.____ or House Bill No. 5167 (request no.
03873'17).
(b) Senate Bill No.____ or House Bill No. 5172 (request no.
03874'17).
(c) Senate Bill No.____ or House Bill No. 5170 (request no.
03876'17).
(d) Senate Bill No.____ or House Bill No. 5165 (request no.
03877'17).
(e) Senate Bill No.____ or House Bill No. 5168 (request no.
03878'17).
(f) Senate Bill No.____ or House Bill No. 5166 (request no.
03879'17).
(g) Senate Bill No.____ or House Bill No. 5171 (request no.
03880'17).