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35A-4-309. Nonprofit organizations -- Contributions -- Payments in lieu of
contributions.
(1) Notwithstanding any other provisions of this chapter for payments by employers,
benefits paid to employees of nonprofit organizations, as described in Section 501(c)(3) of the
Internal Revenue Code, 26 U.S.C. 501(c)(3), that are exempt from income tax under Section
501(a), shall be financed in accordance with the following provisions:
(a) Any nonprofit organization which is, or becomes, subject to this chapter shall pay
contributions under Section 35A-4-303, unless it elects in accordance with this Subsection (1) to
pay to the division for the unemployment fund an amount equal to the amount of regular benefits
and of 1/2 of the extended benefits paid that is attributable to service in the employ of the
nonprofit organization, to individuals for weeks of unemployment that begin during the effective
period of this election.
(b) (i) Any nonprofit organization that is, or becomes, subject to this chapter may elect to
become liable for payments in lieu of contributions for a period of not less than one contribution
year beginning with the date on which the organization becomes subject to this chapter.
(ii) The nonprofit organization shall file a written notice of its election with the division
not later than 30 days immediately following the date that the division gives notice to the
organization that it is subject to this chapter.
(c) Any nonprofit organization that makes an election in accordance with Subsection
(1)(b)(i) shall continue to be liable for payments in lieu of contributions until it files with the
division a written notice terminating its election, not later than 30 days prior to the beginning of
the contribution year for which this termination shall first be effective.
(d) (i) Any nonprofit organization that has been paying contributions under this chapter
may change to a reimbursable basis by filing with the division, no later than 30 days prior to the
beginning of any contribution year, a written notice of election to become liable for payments in
lieu of contributions.
(ii) This election is not terminable by the organization for that year or the next year.
(e) The division may, for good cause, extend the period within which a notice of election
or a notice of termination shall be filed and may permit an election to be retroactive.
(f) (i) The division, in accordance with department rules, shall notify each nonprofit
organization of any determination that the division may make of the organization's status as an
employer, of the effective date of any election that it makes, and of any termination of this
election.
(ii) These determinations are subject to reconsideration, appeal, and review in
accordance with Section 35A-4-508.
(2) Payments in lieu of contributions shall be made in accordance with this Subsection
(2).
(a) At the end of each calendar month, or at the end of any other period as determined by
the division, the division shall bill each nonprofit organization or group of nonprofit
organizations that has elected to make payments in lieu of contributions for an amount equal to
the full amount of regular benefits plus one-half of the amount of extended benefits paid during
this month or other prescribed period that is attributable to service in the employ of the
organization.
(b) Payment of any bill rendered under Subsection (2)(a) shall be made no later than 30
days after the bill was mailed to the last-known address of the nonprofit organization or was
otherwise delivered to it, unless there has been an application for review and redetermination in
accordance with Subsection (2)(d).
(c) Payments made by any nonprofit organization under this Subsection (2) may not be
deducted or deductible, in whole or in part, from the remuneration of individuals in the employ
of the organization.
(d) (i) The amount due specified in any bill from the division shall be conclusive on the
organization unless, not later than 15 days after the bill was mailed to its last-known address or
otherwise delivered to it, the organization files an application for redetermination by the division
or an appeal to the Division of Adjudication, setting forth the grounds for the application or
appeal in accordance with Section 35A-4-508.
(ii) The division shall promptly review and reconsider the amount due specified in the
bill and shall thereafter issue a redetermination in any case in which the application for
redetermination has been filed.
(iii) Any redetermination is conclusive on the organization unless, no later than 15 days
after the redetermination was mailed to its last known address or otherwise delivered to it, the
organization files an appeal to the Division of Adjudication in accordance with Section
35A-4-508 and Chapter 1, Part 3, Adjudicative Proceedings, setting forth the grounds for the
appeal.
(iv) Proceedings on appeal to the Division of Adjudication from the amount of a bill
rendered under this Subsection (2) or a redetermination of the amount shall be in accordance with
Section 35A-4-508.
(e) Past due payments of amounts in lieu of contributions are subject to the same interest
and penalties that, under Subsection 35A-4-305(1), attach to past due contributions.
(3) If any nonprofit organization is delinquent in making payments in lieu of
contributions as required under Subsection (2), the division may terminate the organization's
election to make payment in lieu of contributions as of the beginning of the next contribution
year, and the termination is effective for that and the next contribution year.
(4) (a) In the discretion of the division, any nonprofit organization that elects to become
liable for payments in lieu of contributions shall be required, within 30 days after the effective
date of its election, to deposit money with the division.
(b) The amount of the deposit shall be determined in accordance with this Subsection (4).
(c) (i) The amount of the deposit required by this Subsection (4) shall be equal to 1% of
the organization's total wages paid for employment as defined in Section 35A-4-204 for the four
calendar quarters immediately preceding the effective date of the election, or the biennial
anniversary of the effective date of election, whichever date shall be most recent and applicable.
(ii) If the nonprofit organization did not pay wages in each of these four calendar
quarters, the amount of the deposit is as determined by the division.
(d) (i) Any deposit of money in accordance with this Subsection (4) shall be retained by
the division in an escrow account until liability under the election is terminated, at which time it
shall be returned to the organization, less any deductions as provided in this Subsection (4).
(ii) The division may deduct from the money deposited under this Subsection (4) by a
nonprofit organization to the extent necessary to satisfy any due and unpaid payments in lieu of
contributions and any applicable interest and penalties provided for in Subsection (2)(e).
(iii) The division shall require the organization within 30 days following any deduction
from a money deposit under this Subsection (4) to deposit sufficient additional money to make
whole the organization's deposit at the prior level.
(iv) (A) The division may, at any time, review the adequacy of the deposit made by any
organization.
(B) If, as a result of this review, the division determines that an adjustment is necessary,
it shall require the organization to make an additional deposit within 30 days of written notice of
the division's determination or shall return to it any portion of the deposit the division no longer
considers necessary, as considered appropriate.
(e) If any nonprofit organization fails to make a deposit, or to increase or make whole the
amount of a previously made deposit, as provided under this Subsection (4), the division may
terminate the organization's election to make payments in lieu of contributions.
(f) (i) Termination under Subsection (4)(e) shall continue for not less than the
four-consecutive-calendar-quarter period beginning with the quarter in which the termination
becomes effective.
(ii) The division may extend for good cause the applicable filing, deposit, or adjustment
period by not more than 60 days.
(5) (a) Each employer liable for payments in lieu of contributions shall pay to the
division for the fund the amount of regular benefits plus the amount of one-half of extended
benefits paid that are attributable to service in the employ of the employer.
(b) If benefits paid to an individual are based on wages paid by more than one employer
and one or more of these employers are liable for payments in lieu of contributions, the amount
payable to the fund by each employer liable for the payments shall be determined in accordance
with Subsection (5)(c) or (d).
(c) If benefits paid to an individual are based on wages paid by one or more employers
who are liable for payments in lieu of contributions and on wages paid by one or more employers
who are liable for contributions, the amount of benefits payable by each employer that is liable
for payments in lieu of contributions shall be an amount that bears the same ratio to the total
benefits paid to the individual as the total base-period wages paid to the individual by that
employer bear to the total base-period wages paid to the individual by all of the individual's
base-period employers.
(d) If benefits paid to an individual are based on wages paid by two or more employers
who are liable for payments in lieu of contributions, the amount of benefits payable by each of
those employers shall be an amount which bears the same ratio to the total benefits paid to the
individual as the total base-period wages paid to the individual by the employer bear to the total
base-period wages paid to the individual by all of the individual's base-period employers.
(6) (a) (i) Two or more employers who have become liable for payments in lieu of
contributions, in accordance with this section and Subsection 35A-4-204(2)(d), may file a joint
application to the division for the establishment of a group account for the purpose of sharing the
cost of benefits paid that are attributable to service in the employ of these employers.
(ii) Each application shall identify and authorize a group representative to act as the
group's agent for the purpose of this Subsection (6).
(b) (i) Upon approval of the application, the division shall establish a group account for
these employers effective as of the beginning of the calendar quarter in which it receives the
application and shall notify the group's representative of the effective date of the account.
(ii) This account shall remain in effect for not less than two contribution years and
thereafter until terminated at the discretion of the division or upon application by the group.
(c) Upon establishment of the account, each member of the group is liable for payments
in lieu of contributions with respect to each calendar quarter in the amount that bears the same
ratio to the total benefits paid in the quarter attributable to service performed in the employ of all
members of the group as the total wages paid for service in employment by the member in the
quarter bear to the total wages paid during the quarter for service performed in the employ of all
members of the group.
(d) The department shall prescribe rules, with respect to applications for establishment,
maintenance, and termination of group accounts authorized by this Subsection (6), for addition of
new members to, and withdrawal of active members from, these accounts, for the determination
of the amounts that are payable under this Subsection (6) by members of the group, and the time
and manner of these payments.
(7) (a) An employing unit that acquires a nonprofit organization or substantially all the
assets of a nonprofit organization that has elected reimbursable coverage as defined in Subsection
(1), in accordance with rules made by the commission, shall be given the subject date of the
transferring nonprofit organization, provided the transferring nonprofit organization ceases to
operate as an employing unit at the point of acquisition.
(b) The acquiring entity shall reimburse the Unemployment Compensation Fund for the
transferring nonprofit organization's share of any unreimbursed benefits paid to former
employees of the transferring nonprofit organization.
Amended by Chapter 297, 2011 General Session
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