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H.B. 314





Chief Sponsor: Val L. Peterson

Senate Sponsor: ____________

             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Employment Security Act by amending information collected by
             10      the Unemployment Insurance Division.
             11      Highlighted Provisions:
             12          This bill:
             13          .    requires an employer to include additional wage-related information on quarterly
             14      unemployment contribution reports filed with the Unemployment Insurance
             15      Division including occupation title and hours worked for each paid employee during
             16      the calendar quarter; and
             17          .    makes technical changes.
             18      Money Appropriated in this Bill:
             19          None
             20      Other Special Clauses:
             21          This bill takes effect on July 1, 2012.
             22      Utah Code Sections Affected:
             23      AMENDS:
             24          35A-4-305, as last amended by Laws of Utah 2011, Chapter 297
             26      Be it enacted by the Legislature of the state of Utah:
             27          Section 1. Section 35A-4-305 is amended to read:

             28           35A-4-305. Collection of contributions -- Unpaid contributions to bear interest --
             29      Delinquent payments collected by civil action -- Employer information required --
             30      Reimbursements -- Liens for delinquent payments.
             31          (1) (a) Contributions unpaid on the date on which they are due and payable, as
             32      prescribed by the division, shall bear interest at the rate of 1% per month from and after that
             33      date until payment plus accrued interest is received by the division.
             34          (b) (i) Contribution reports not made and filed by the date on which they are due as
             35      prescribed by the division are subject to a penalty to be assessed and collected in the same
             36      manner as contributions due under this section equal to 5% of the contribution due if the failure
             37      to file on time was not more than 15 days, with an additional 5% for each additional 15 days or
             38      fraction thereof during which the failure continued, but not to exceed 25% in the aggregate and
             39      not less than $25 with respect to each reporting period.
             40          (ii) If a report is filed after the required time and it is shown to the satisfaction of the
             41      division or its authorized representative that the failure to file was due to a reasonable cause
             42      and not to willful neglect, no addition shall be made to the contribution.
             43          (c) (i) If contributions are unpaid after 10 days from the date of the mailing or personal
             44      delivery by the division or its authorized representative, of a written demand for payment, there
             45      shall attach to the contribution, to be assessed and collected in the same manner as
             46      contributions due under this section, a penalty equal to 5% of the contribution due.
             47          (ii) A penalty may not attach if within 10 days after the mailing or personal delivery,
             48      arrangements for payment have been made with the division, or its authorized representative,
             49      and payment is made in accordance with those arrangements.
             50          (d) The division shall assess as a penalty a service charge, in addition to any other
             51      penalties that may apply, in an amount not to exceed the service charge imposed by Section
             52      7-15-1 for dishonored instruments if:
             53          (i) any amount due the division for contributions, interest, other penalties or benefit
             54      overpayments is paid by check, draft, order, or other instrument; and
             55          (ii) the instrument is dishonored or not paid by the institution against which it is drawn.
             56          (e) Except for benefit overpayments under Subsection 35A-4-405 (5), benefit
             57      overpayments, contributions, interest, penalties, and assessed costs, uncollected three years
             58      after they become due, may be charged as uncollectible and removed from the records of the

             59      division if:
             60          (i) no assets belonging to the liable person and subject to attachment can be found; and
             61          (ii) in the opinion of the division there is no likelihood of collection at a future date.
             62          (f) Interest and penalties collected in accordance with this section shall be paid into the
             63      Special Administrative Expense Account created by Section 35A-4-506 .
             64          (g) Action required for the collection of sums due under this chapter is subject to the
             65      applicable limitations of actions under Title 78B, Chapter 2, Statutes of Limitations.
             66          (2) (a) If an employer fails to file a report when prescribed by the division for the
             67      purpose of determining the amount of the employer's contribution due under this chapter, or if
             68      the report when filed is incorrect or insufficient or is not satisfactory to the division, the
             69      division may determine the amount of wages paid for employment during the period or periods
             70      with respect to which the reports were or should have been made and the amount of
             71      contribution due from the employer on the basis of any information it may be able to obtain.
             72          (b) The division shall give written notice of the determination to the employer.
             73          (c) The determination is considered correct unless:
             74          (i) the employer, within 10 days after mailing or personal delivery of notice of the
             75      determination, applies to the division for a review of the determination as provided in Section
             76      35A-4-508 ; or
             77          (ii) [unless] the division or its authorized representative of its own motion reviews the
             78      determination.
             79          (d) The amount of contribution determined under Subsection (2)(a) is subject to
             80      penalties and interest as provided in Subsection (1).
             81          (3) (a) If, after due notice, an employer defaults in the payment of contributions,
             82      interest, or penalties on the contributions, or a claimant defaults in a repayment of benefit
             83      overpayments and penalties on the overpayments, the amount due shall be collectible by civil
             84      action in the name of the division, and the employer adjudged in default shall pay the costs of
             85      the action.
             86          (b) Civil actions brought under this section to collect contributions, interest, or
             87      penalties from an employer, or benefit overpayments and penalties from a claimant shall be:
             88          (i) heard by the court at the earliest possible date; and
             89          (ii) entitled to preference upon the calendar of the court over all other civil actions

             90      except:
             91          (A) petitions for judicial review under this chapter; and
             92          (B) cases arising under the workers' compensation law of this state.
             93          (c) (i) (A) To collect contributions, interest, or penalties, or benefit overpayments and
             94      penalties due from employers or claimants located outside Utah, the division may employ
             95      private collectors providing debt collection services outside Utah.
             96          (B) Accounts may be placed with private collectors only after the employer or claimant
             97      has been given a final notice that the division intends to place the account with a private
             98      collector for further collection action.
             99          (C) The notice shall advise the employer or claimant of the employer's or claimant's
             100      rights under this chapter and the applicable rules of the department.
             101          (ii) (A) A private collector may receive as compensation up to 25% of the lesser of the
             102      amount collected or the amount due, plus the costs and fees of any civil action or postjudgment
             103      remedy instituted by the private collector with the approval of the division.
             104          (B) The employer or claimant shall be liable to pay the compensation of the collector,
             105      costs, and fees in addition to the original amount due.
             106          (iii) A private collector is subject to the federal Fair Debt Collection Practices Act, 15
             107      U.S.C. Sec. 1692 et seq.
             108          (iv) (A) A civil action may not be maintained by a private collector without specific
             109      prior written approval of the division.
             110          (B) When division approval is given for civil action against an employer or claimant,
             111      the division may cooperate with the private collector to the extent necessary to effect the civil
             112      action.
             113          (d) (i) Notwithstanding Section 35A-4-312 , the division may disclose the contribution,
             114      interest, penalties or benefit overpayments and penalties, costs due, the name of the employer
             115      or claimant, and the employer's or claimant's address and telephone number when any
             116      collection matter is referred to a private collector under Subsection (3)(c).
             117          (ii) A private collector is subject to the confidentiality requirements and penalty
             118      provisions provided in Section 35A-4-312 and Subsection 76-8-1301 (4), except to the extent
             119      disclosure is necessary in a civil action to enforce collection of the amounts due.
             120          (e) An action taken by the division under this section may not be construed to be an

             121      election to forego other collection procedures by the division.
             122          (4) (a) In the event of a distribution of an employer's assets under an order of a court
             123      under the laws of Utah, including a receivership, assignment for benefits of creditors,
             124      adjudicated insolvency, composition, or similar proceedings, contributions then or thereafter
             125      due shall be paid in full prior to all other claims except taxes and claims for wages of not more
             126      than $400 to each claimant, earned within five months of the commencement of the
             127      proceeding.
             128          (b) If an employer commences a proceeding in the Federal Bankruptcy Court under a
             129      chapter of 11 U.S.C. 101 et seq., as amended by the Bankruptcy Abuse Prevention and
             130      Consumer Protection Act of 2005, contributions, interest, and penalties then or thereafter due
             131      shall be entitled to the priority provided for taxes, interest, and penalties in the Bankruptcy
             132      Abuse Prevention and Consumer Protection Act of 2005.
             133          (5) (a) In addition and as an alternative to any other remedy provided by this chapter
             134      and provided that no appeal or other proceeding for review provided by this chapter is then
             135      pending and the time for taking it has expired, the division may issue a warrant in duplicate,
             136      under its official seal, directed to the sheriff of any county of the state, commanding the sheriff
             137      to levy upon and sell the real and personal property of a delinquent employer or claimant found
             138      within the sheriff's county for the payment of the contributions due, with the added penalties,
             139      interest, or benefit overpayment and penalties, and costs, and to return the warrant to the
             140      division and pay into the fund the money collected by virtue of the warrant by a time to be
             141      specified in the warrant, not more than 60 days from the date of the warrant.
             142          (b) (i) Immediately upon receipt of the warrant in duplicate, the sheriff shall file the
             143      duplicate with the clerk of the district court in the sheriff's county.
             144          (ii) The clerk shall enter in the judgment docket, in the column for judgment debtors,
             145      the name of the delinquent employer or claimant mentioned in the warrant, and in appropriate
             146      columns the amount of the contribution, penalties, interest, or benefit overpayment and
             147      penalties, and costs, for which the warrant is issued and the date when the duplicate is filed.
             148          (c) The amount of the docketed warrant shall:
             149          (i) have the force and effect of an execution against all personal property of the
             150      delinquent employer; and
             151          (ii) become a lien upon the real property of the delinquent employer or claimant in the

             152      same manner and to the same extent as a judgment duly rendered by a district court and
             153      docketed in the office of the clerk.
             154          (d) After docketing, the sheriff shall:
             155          (i) proceed in the same manner as is prescribed by law with respect to execution issued
             156      against property upon judgments of a court of record; and
             157          (ii) be entitled to the same fees for the sheriff's services in executing the warrant, to be
             158      collected in the same manner.
             159          (6) (a) Contributions imposed by this chapter are a lien upon the property of an
             160      employer liable for the contribution required to be collected under this section who shall sell
             161      out the employer's business or stock of goods or shall quit business, if the employer fails to
             162      make a final report and payment on the date subsequent to the date of selling or quitting
             163      business on which they are due and payable as prescribed by rule.
             164          (b) (i) An employer's successor, successors, or assigns, if any, are required to withhold
             165      sufficient of the purchase money to cover the amount of the contributions and interest or
             166      penalties due and payable until the former owner produces a receipt from the division showing
             167      that they have been paid or a certificate stating that no amount is due.
             168          (ii) If the purchaser of a business or stock of goods fails to withhold sufficient purchase
             169      money, the purchaser is personally liable for the payment of the amount of the contributions
             170      required to be paid by the former owner, interest and penalties accrued and unpaid by the
             171      former owner, owners, or assignors.
             172          (7) (a) If an employer is delinquent in the payment of a contribution, the division may
             173      give notice of the amount of the delinquency by registered mail to all persons having in their
             174      possession or under their control, any credits or other personal property belonging to the
             175      employer, or owing any debts to the employer at the time of the receipt by them of the notice.
             176          (b) A person notified under Subsection (7)(a) shall neither transfer nor make any other
             177      disposition of the credits, other personal property, or debts until:
             178          (i) the division has consented to a transfer or disposition; or
             179          (ii) 20 days after the receipt of the notice.
             180          (c) All persons notified under Subsection (7)(a) shall, within five days after receipt of
             181      the notice, advise the division of credits, other personal property, or other debts in their
             182      possession, under their control or owing by them, as the case may be.

             183          (8) (a) (i) Each employer shall furnish the division necessary information for the
             184      [proper] administration of this chapter [and]. The information shall include, for each calendar
             185      quarter, wage information for each paid employee, [for each calendar quarter.] including the
             186      employee's:
             187          (A) Social Security number;
             188          (B) first initial, second initial, and full last name;
             189          (C) occupation title;
             190          (D) gross wages paid as defined in Section 35A-4-208 ; and
             191          (E) number of hours worked.
             192          (ii) The information shall be furnished at a time, in the form, and to those individuals
             193      as the department may by rule require.
             194          (b) (i) Each employer shall furnish each individual worker who is separated that
             195      information as the department may by rule require, and shall furnish within 48 hours of the
             196      receipt of a request from the division a report of the earnings of any individual during the
             197      individual's base-period.
             198          (ii) The report shall be on a form prescribed by the division and contain all information
             199      prescribed by the division.
             200          (c) (i) For each failure by an employer to conform to this Subsection (8) the division
             201      shall, unless good cause is shown, assess a $50 penalty if the filing was not more than 15 days
             202      late.
             203          (ii) If the filing is more than 15 days late, the division shall assess an additional penalty
             204      of $50 for each 15 days, or a fraction of the 15 days that the filing is late, not to exceed $250
             205      per filing.
             206          (iii) The penalty is to be collected in the same manner as contributions due under this
             207      chapter.
             208          (d) (i) The division shall prescribe rules providing standards for determining which
             209      contribution reports shall be filed on magnetic or electronic media or in other machine-readable
             210      form.
             211          (ii) In prescribing these rules, the division:
             212          (A) may not require an employer to file contribution reports on magnetic or electronic
             213      media unless the employer is required to file wage data on at least 250 employees during any

             214      calendar quarter or is an authorized employer representative who files quarterly tax reports on
             215      behalf of 100 or more employers during any calendar quarter;
             216          (B) shall take into account, among other relevant factors, the ability of the employer to
             217      comply at reasonable cost with the requirements of the rules; and
             218          (C) may require an employer to post a bond for failure to comply with the rules
             219      required by this Subsection (8)(d).
             220          (9) (a) (i) An employer liable for payments in lieu of contributions shall file
             221      Reimbursable Employment and Wage Reports.
             222          (ii) The reports are due on the last day of the month that follows the end of each
             223      calendar quarter unless the division, after giving notice, changes the due date.
             224          (iii) A report postmarked on or before the due date is considered timely.
             225          (b) (i) Unless the employer can show good cause, the division shall assess a $50
             226      penalty against an employer who does not file Reimbursable Employment and Wage Reports
             227      within the time limits set out in Subsection (9)(a) if the filing was not more than 15 days late.
             228          (ii) If the filing is more than 15 days late, the division shall assess an additional penalty
             229      of $50 for each 15 days, or a fraction of the 15 days that the filing is late, not to exceed $250
             230      per filing.
             231          (iii) The division shall assess and collect the penalties referred to in this Subsection
             232      (9)(b) in the same manner as prescribed in Sections 35A-4-309 and 35A-4-311 .
             233          (10) If a person liable to pay a contribution or benefit overpayment imposed by this
             234      chapter neglects or refuses to pay it after demand, the amount, including any interest, additional
             235      amount, addition to contributions, or assessable penalty, together with any additional accruable
             236      costs, shall be a lien in favor of the division upon all property and rights to property, whether
             237      real or personal belonging to the person.
             238          (11) (a) The lien imposed by Subsection (10) arises at the time the assessment, as
             239      defined in the department rules, is made and continues until the liability for the amount
             240      assessed, or a judgment against the taxpayer arising out of the liability, is satisfied.
             241          (b) (i) The lien imposed by Subsection (10) is not valid as against a purchaser, holder
             242      of a security interest, mechanics' lien holder, or judgment lien creditor until the division files a
             243      warrant with the clerk of the district court.
             244          (ii) For the purposes of this Subsection (11)(b):

             245          (A) "Judgment lien creditor" means a person who obtains a valid judgment of a court
             246      of record for recovery of specific property or a sum certain of money, and who in the case of a
             247      recovery of money, has a perfected lien under the judgment on the property involved. A
             248      judgment lien does not include inchoate liens such as attachment or garnishment liens until
             249      they ripen into a judgment. A judgment lien does not include the determination or assessment
             250      of a quasi-judicial authority, such as a state or federal taxing authority.
             251          (B) "Mechanics' lien holder" means any person who has a lien on real property, or on
             252      the proceeds of a contract relating to real property, for services, labor, or materials furnished in
             253      connection with the construction or improvement of the property. A person has a lien on the
             254      earliest date the lien becomes valid against subsequent purchasers without actual notice, but not
             255      before the person begins to furnish the services, labor, or materials.
             256          (C) "Person" means:
             257          (I) an individual;
             258          (II) a trust;
             259          (III) an estate;
             260          (IV) a partnership;
             261          (V) an association;
             262          (VI) a company;
             263          (VII) a limited liability company;
             264          (VIII) a limited liability partnership; or
             265          (IX) a corporation.
             266          (D) "Purchaser" means a person who, for adequate and full consideration in money or
             267      money's worth, acquires an interest, other than a lien or security interest, in property which is
             268      valid under state law against subsequent purchasers without actual notice.
             269          (E) "Security interest" means any interest in property acquired by contract for the
             270      purpose of securing payment or performance of an obligation or indemnifying against loss or
             271      liability. A security interest exists at any time:
             272          (I) the property is in existence and the interest has become protected under the law
             273      against a subsequent judgment lien arising out of an unsecured obligation; and
             274          (II) to the extent that, at that time, the holder has parted with money or money's worth.
             275          Section 2. Effective date.

             276          This bill takes effect on July 1, 2012.

Legislative Review Note
    as of 1-31-12 11:04 AM

Office of Legislative Research and General Counsel

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