Bill Text: MI SB0614 | 2009-2010 | 95th Legislature | Engrossed

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Bill Title: Employment security; administration; disposition of certain penalties and interest; provide for. Amends sec. 15 of 1936 (Ex Sess) PA 1 (MCL 421.15). TIE BAR WITH: SB 0612'09, SB 0613'09, SB 0615'09

Spectrum: Partisan Bill (Republican 11-0)

Status: (Engrossed - Dead) 2009-06-25 - Referred To Committee On Labor [SB0614 Detail]

Download: Michigan-2009-SB0614-Engrossed.html

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SB-0614, As Passed Senate, June 25, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SENATE BILL No. 614

 

 

May 27, 2009, Introduced by Senators GILBERT, PATTERSON, BIRKHOLZ, ALLEN, PAPPAGEORGE, BROWN, JANSEN, CROPSEY, VAN WOERKOM, SANBORN and KAHN and referred to the Committee on Commerce and Tourism.

 

 

 

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

 

"Michigan employment security act,"

 

by amending section 15 (MCL 421.15), as amended by 1996 PA 498.

 

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 commission, shall bear

 

interest at the rate of 1% per month, computed on a day to day 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

 

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 rate of 1% per month, computed on a day-to-day

 

basis for each day the amounts 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 due date. Interest and

 

penalties collected pursuant to this section shall be paid into the

 

contingent fund, except that interest and penalties collected under

 

section 62 shall be paid into the special fraud control fund. The

 

commission 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

 

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

 

in accordance with section 32a. A review by the commission or an

 

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

 

amount required to be paid pursuant to the assessment. The

 

commission through its authorized employees, under a warrant

 

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

 

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 not be exempt from

 

levy under the warrant. Wages subject to a notice to withhold shall

 

be 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 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.

 

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 executions issued against property upon judgments by a

 

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

 

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

 

notice of 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 in its possession or under its control a

 

credit or other intangible property belonging to the employer,

 

claimant, employee of the commission, or third party, or who owes a

 

debt to the employer, claimant, employee of the commission, or

 

third party at the time of the receipt of the notice. A person or

 

legal entity so notified shall not transfer or make a disposition

 

of the credit, other intangible property, or debt without retaining

 

an amount sufficient to pay the amount specified in the notice

 

unless the commission 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 notified shall advise the commission

 

unemployment agency within 5 days after receipt of the notice of a

 

credit, other intangible property, or debt, which 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

 

commission 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 commission unemployment agency,

 

or third party subject to a notice to withhold shall be paid to the

 

commission 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 notice, an employer defaults in

 

payment of contributions or interest on the contributions, or a

 

claimant, employee of the commission unemployment agency, or third

 

party defaults in the payment of a penalty or interest on a

 

penalty, the commission 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 commission unemployment

 

agency, or third party adjudged in default shall pay costs of the

 

action. An action by the commission unemployment agency against a

 

claimant, employee of the commission unemployment agency, 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 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 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 unemployment agency. 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 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 commission unemployment agency. The

 

circuit court of the county in which the employer or employing unit

 

or claimant, employee of the commission 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, shall have 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 commission unemployment agency

 

or heard or reviewed by a referee or the appeal board. The court

 

shall not have jurisdiction of the action unless written notice of

 

claim is given to the commission 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 to such an extent and in a manner as it may

 

consider proper. Either party to the action shall have the right of

 

appeal, as is now provided by law, in other civil actions. An

 

action by a claimant, employee of the commission unemployment

 

agency, or third party against the commission unemployment agency

 

under this subsection shall be brought only to recover penalties

 

and interest on those penalties improperly assessed by the

 

commission 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 commission

 

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 may be allowed by the court, in an amount not to exceed

 

the actual earnings of the 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

 

contributions, interest, and penalties payable under this act to

 

the commission unemployment agency from an employer, claimant,

 

employee of the commission unemployment agency, or third party that

 

neglects to pay the same when due shall be a first and prior lien

 

upon all property and rights to property, real and personal,

 

belonging to the employer, claimant, employee of the commission

 

unemployment agency, or third party. The lien shall continue 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 to the property and rights to

 

property of the employer, claimant, employee of the commission

 

unemployment agency, or third party, whether real or personal, from

 

and after the date that a 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 applies 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.

 

     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 unemployment agency 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 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 commission 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 form shall specify such other information,

 

as determined by the commission unemployment agency, 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 unemployment

 

agency. 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 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 the rules of the commission unemployment agency, 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 unemployment agency

 

pursuant to this act, the commission unemployment agency may make

 

an estimate of the liability of that employing unit from

 

information it may obtain and, according to that estimate so made,

 

assess the employing unit for the contributions, penalties, and

 

interest due. The commission unemployment agency shall have the

 

power only after a default continues for 30 days and after the

 

commission 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 commission unemployment agency by this section is are

 

additional to other powers and rights vested in the commission in

 

pursuance of the unemployment agency under other provisions of this

 

act. The commission unemployment agency is not precluded from

 

exercising any of the collection remedies provided for by this act

 

Senate Bill No. 614 as amended June 25, 2009

 

even though an application for a redetermination or an appeal is

 

pending final disposition.

 

     (l) A person recording a lien provided for in 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.

 

     Enacting section 1. This amendatory act does not take effect

 

unless all of the following bills of the 95th Legislature are

 

enacted into law:

 

     (a) Senate Bill No. 615.                                  

 

         

 

<<                                                            

 

         

 

     (b)>> Senate Bill No. 613.                                   

 

         

 

     <<(c)>> Senate Bill No. 612.