Bill Text: MI HB5715 | 2011-2012 | 96th Legislature | Introduced
Bill Title: Employment security; contribution rate; computation and charging upon transfer of business; modify for certain employers. Amends sec. 22 of 1936 (Ex Sess) PA 1 (MCL 421.22).
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2012-06-01 - Printed Bill Filed 06/01/2012 [HB5715 Detail]
Download: Michigan-2011-HB5715-Introduced.html
HOUSE BILL No. 5715
May 31, 2012, Introduced by Reps. Price and Horn and referred to the Committee on Commerce.
A bill to amend 1936 (Ex Sess) PA 1, entitled
"Michigan employment security act,"
by amending section 22 (MCL 421.22), as amended by 2005 PA 17.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 22. (a) If an employer subject to this act transfers any
of the assets of the business by any means otherwise than in the
ordinary course of trade and there is not substantially common
ownership, management, or control of the transferor and the
transferee, the transfer shall be deemed a "transfer of business"
for the purposes of this section if the commission determines both
of the following:
(1) That the transferee is an employer subject to this act on
the transfer date, has become subject to this act as of the
transfer date under section 41(2)(a) or elects to become subject to
this act as of the transfer date under section 25.
(2) That the transferee has acquired and used the transferor's
trade name or good will, or that the transferee has continued or
within 12 months after the transfer resumed all or part of the
business of the transferor either in the same establishment or
elsewhere. An employer shall not be considered to be a transferee
for purposes of this subdivision if the employer continues or
resumes operation of the business upon reacquiring the business
assets due to the purchaser's default on a purchase agreement
between the employer and the purchaser.
(b) Notwithstanding subsection (a), a transfer of assets to a
transferee that involves less than 75% of the transferor's assets
shall not be deemed a transfer of business unless all of the
following occur:
(1) The commission is notified of the transfer of assets by
the transferor or transferee within 30 days after the end of the
quarter in which the transfer occurred.
(2) The commission receives within 30 days after its request
written approval by the transferor and transferee of an experience
account transfer determined in accordance with the provisions of
subsection (c).
(3) In the case of a transferee who elects under section 25 to
become subject as of the transfer date, the commission receives the
election within 30 days after the mailing of a notice of the right
to elect.
(c) (1) In the case of a transfer of business as defined in
subsection (a) or (b), the commission shall assign the transferor's
experience account, or a pro rata part of the account, to the
transferee. The commission shall make the assignment as of the date
on which the business is transferred or as of June 30 of the year
in which the business was transferred, whichever date is earlier.
The pro rata part of the transferor's experience account to be
assigned to the transferee shall be determined on the basis of the
percentage relationship to the nearest 1/2 of 1% that the insured
payroll for the 4 completed calendar quarters immediately before
the date of transfer properly allocable to the transferred portion
of the business bears to the insured payroll for the same period
allocable to the entire business of the transferor immediately
before the date of the transfer.
(2) When the commission transfers an employer's experience
account in whole or in part under this section, it shall also
transfer a proportionate share of the amount of the total wages and
wages subject to contributions under this act paid by the
transferor and properly allocable to the transfer of business; and
the transferred account shall be chargeable for all benefit
payments based on employment in the business or portion of the
business transferred.
(3) In determining whether the transferee qualifies for a
contribution rate that includes a chargeable benefits component
under section 19, the experience of the transferred account shall
be included as part of the experience of the transferee's
experience account. If on the date of the transfer the transferee
qualified for a contribution rate that includes a chargeable
benefits component and the transferor did not qualify because of
the provisions of section 19(a)(1), the transferee shall not
thereby lose the qualified status.
(d) In the case of a transfer of business as defined in
subsection
(a) or (b), of this section, contribution rates are
determined as follows:
(1) The rates of contributions applicable to the transferor
and transferee for the calendar year after the calendar year of the
transfer shall be respectively determined in accordance with
section 19. In case of a transfer of part of an employer's
experience account under subsection (c), the rate of contributions
applicable to the transferor and transferee shall not be changed
for the portion of the current calendar year remaining on the
transfer date. In case of a transfer of an employer's entire
experience account under subsection (c), all of the following
apply:
(i) The transferor shall have no further interest in the
experience account.
(ii) The transferor's coverage shall be terminated as of the
effective date of the transfer under section 24(b).
(iii) If the transferor again becomes an employer as defined in
section 41 in the same calendar year in which coverage is
terminated, the transferor's contribution rate for the remainder of
the calendar year shall be 2.7% as provided in section 19.
(iv) The rate of contributions applicable to the transferee
shall not be changed for the portion of the current calendar year
remaining on the transfer date.
(2) A transferee that has no rate of contributions applicable
immediately before the transfer date shall, beginning with the
first day of the quarter in which the transfer occurs, be assigned
the same rate of contributions that applied to the transferor on
the date of the transfer and a contribution rate of 2.7% for any
portion of the calendar year before the first day of the quarter in
which the transfer occurs.
(3) If transfers of businesses simultaneously involve 2 or
more transferors and a single transferee who has no rate of
contributions applicable immediately before the transfer date, the
transferee shall be assigned a contribution rate beginning with the
first day of the quarter in which the transfers occur based upon
the experience account percentage determined by the transferred
experience account balances and the total and insured payrolls
properly allocable to the transferee as of the date on which the
businesses were transferred, or as of June 30 of the year in which
the businesses were transferred, whichever is earlier, and a
contribution rate of 2.7% for any portion of the calendar year
before the first day of the quarter in which the transfers occur.
If none of the transferors was an employer entitled to an adjusted
contribution rate, then a contribution rate of 2.7% shall apply to
the transferee for the calendar year in which the transfers occur.
