Bill Text: MI SB0614 | 2009-2010 | 95th Legislature | Introduced
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-Introduced.html
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
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.____ or House Bill No.____ (request no.
01821'09).
(c) Senate Bill No. 613.
(d) Senate Bill No. 612.