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S.B. 129

This document includes Senate Committee Amendments incorporated into the bill on Fri, Jan 27, 2012 at 8:58 AM by kcallred. --> This document includes Senate Committee Amendments incorporated into the bill on Fri, Jan 27, 2012 at 9:20 AM by khelgesen. -->              1     

UNEMPLOYMENT INSURANCE MODIFICATIONS

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Curtis S. Bramble

             5     
House Sponsor: Jeremy A. Peterson

             6     

             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Employment Security Act by reducing the maximum
             10      unemployment insurance contribution rate for an employer beginning in calendar year
             11      2012 and capping the social unemployment insurance contribution rate for all
             12      employers for calendar year 2012 only.
             13      Highlighted Provisions:
             14          This bill:
             15          .    reduces the maximum unemployment insurance contribution rate for an employer
             16      from 9% plus the social contribution rate to 7% plus the social contribution rate
             17      beginning in calendar year 2012;
             18          .    caps the social unemployment insurance contribution rate for all employers at .4%
             19      for calendar year 2012 only;
             20          .    provides that if the reserve fund is insolvent, the reserve factor is 2.0 until the
             21      reserve fund becomes solvent;
             22          .    allows the Unemployment Insurance Division to accept an offer of compromise
             23      from an employer or claimant to reduce past due debt under certain circumstances;
             24          .    requires the Unemployment Insurance Division to make rules allowing for an offer
             25      of compromise; and
             26          .    makes technical changes.
             27      Money Appropriated in this Bill:



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             28
         None
             29      Other Special Clauses:
             30          This bill provides an immediate effective date.
             31      Utah Code Sections Affected:
             32      AMENDS:
             33          35A-4-303, as last amended by Laws of Utah 2011, Chapters 297 and 342
             34          35A-4-304, as last amended by Laws of Utah 2011, Chapter 297
             35          35A-4-305, as last amended by Laws of Utah 2011, Chapter 297
             36     

             37      Be it enacted by the Legislature of the state of Utah:
             38          Section 1. Section 35A-4-303 is amended to read:
             39           35A-4-303. Determination of contribution rates.
             40          (1) (a) An employer's basic contribution rate is the same as the employer's benefit
             41      ratio[,] and is determined by dividing the total benefit costs charged back to an employer
             42      during the immediately preceding four fiscal years by the total taxable wages of the employer
             43      for the same time period, calculated to four decimal places, disregarding [the] any remaining
             44      fraction[, if any].
             45          (b) In calculating the basic contribution rate under Subsection (1)(a)[: (i)], if four fiscal
             46      years of data are not available[,]:
             47          (i) the data of [three] the number of complete fiscal years that is available shall be
             48      divided by the total taxable wages for the same time period[;]; or
             49          [(ii) if three fiscal years of data are not available, the data of two fiscal years shall be
             50      divided by the total taxable wages for the same time period; or]
             51          [(iii) if two fiscal years of data are not available, the data of one fiscal year shall be
             52      divided by the total taxable wages for the same time period.]
             53          [(2) (a) In calculating the social contribution rate under Subsection (2)(b) or (c):]
             54          [(i) if four fiscal years of data are not available, the data of three fiscal years shall be
             55      divided by the total taxable wages for the same time period; or]
             56          [(ii) if three fiscal years of data are not available, the data of two fiscal years shall be
             57      divided by the total taxable wages for the same time period.]
             58          [(b) Beginning January 1, 2005, the division shall calculate the social contribution rate



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Senate Committee Amendments 1-27-2012 kc/pla
             59
     by dividing all social costs as defined in Subsection 35A-4-307 (1) applicable to the preceding
             60      four fiscal years by the total taxable wages of all employers subject to contributions for the
             61      same period, calculated to four decimal places, disregarding any remaining fraction.]
             62          [(c) Beginning January 1, 2009]
             63          (ii) if the employer is a new employer, the basic contribution rate shall be determined
             64      as described in Subsection (5).
             65          (2) (a) Subject to Subsection (2)(b), the division shall [calculate] determine the social
             66      contribution rate by dividing all social costs as defined in Subsection 35A-4-307 (1) applicable
             67      to the preceding four fiscal years by the total taxable wages of all employers subject to
             68      contributions for the same period, calculated to four decimal places, disregarding any
             69      remaining fraction, and [rounded] rounding the result to three decimal places[, disregarding any
             70      further fraction,] as follows:
             71          (i) if the fourth decimal place is S. [ .0004 ] four .S or less, [or rounding up to the next
             71a      higher
             72      number,] the third decimal place does not change; or
             73          (ii) if the fourth decimal place is S. [ .0005 ] five .S or more, rounding the third decimal
             73a      place up.
             74          (b) For calendar year 2012 only, if the calculation of the social contribution rate under
             75      Subsection (2)(a) is greater than .004, the social contribution rate for calendar year 2012 is
             76      .004.
             77          (3) (a) [Beginning January 1, 2000, the] The division shall [by administrative decision]
             78      set the reserve factor at a rate that [shall sustain] sustains an adequate reserve.
             79          (b) For the purpose of setting the reserve factor:
             80          [(i) (A) the adequate reserve is defined as between 17 and 19 months of benefits at the
             81      average of the five highest benefit cost rates in the last 25 years;]
             82          [(B) beginning January 1, 2009,] (i) the adequate reserve is defined as between 18 and
             83      24 months of benefits at the average of the five highest benefit cost rates in the last 25 years;
             84          (ii) the division shall set the reserve factor [shall be] at 1.0000 if the actual reserve fund
             85      balance as of June 30 preceding the computation date is determined to be an adequate reserve;
             86          (iii) the division shall set the reserve factor [will be set] between 0.5000 and 1.0000 if
             87      the actual reserve fund balance as of June 30 preceding the computation date is greater than the
             88      adequate reserve;
             89          (iv) the division shall set the reserve factor [will be set] between 1.0000 and 1.5000 if



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             90
     the actual reserve fund balance as of June 30 prior to the computation date is less than the
             91      adequate reserve;
             92          (v) if the actual reserve fund balance as of June 30 preceding the computation date is
             93      insolvent or negative or if there is an outstanding loan from the Federal Unemployment
             94      Account[,] or other lending institution, the division shall set the reserve factor [will be set] at
             95      2.0000 until the actual reserve fund balance as of June 30 preceding the computation date is
             96      determined [to be an adequate reserve] by the division to be solvent or positive and there is no
             97      outstanding loan;
             98          (vi) the division shall set the reserve factor [will be set] on or before January 1 of each
             99      year; and
             100          (vii) money made available to the state under Section 903 of the Social Security Act,
             101      42 U.S.C. 1103, as amended, which is received on or after January 1, 2004, may not be
             102      considered in establishing the reserve factor under this section for the rate year 2005 or any
             103      [subsequent] following rate year.
             104          [(4) (a) On or after January 1, 2004, an employer's overall contribution rate is the
             105      employer's basic contribution rate multiplied by the reserve factor established according to
             106      Subsection (3), calculated to four decimal places, disregarding the remaining fraction, plus the
             107      social contribution rate established according to Subsection (2), and calculated to three
             108      decimal places, disregarding the remaining fraction, but not more than a maximum overall
             109      contribution rate of 9.0%, plus the applicable social contribution rate and not less than 1.1% for
             110      new employers.]
             111          [(b)] (4) (a) Beginning January 1, 2009, an employer's overall contribution rate is:
             112          (i) except as provided in Subsection (4)(a)(ii) or (iii), the employer's basic contribution
             113      rate multiplied by the reserve factor established [according to] under Subsection (3)(b),
             114      calculated to four decimal places, disregarding [the] any remaining fraction, plus the social
             115      contribution rate established [according to] under Subsection (2), and the result calculated to
             116      three decimal places, disregarding [the] any remaining fraction[, but not more than a maximum
             117      overall contribution rate of 9%, plus the applicable social contribution rate and not less than
             118      1.1% for new employers.];
             119          (ii) if under Subsection (4)(a)(i) the overall contribution rate calculation for an
             120      employer is greater than 9% plus the applicable social contribution rate, the overall



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             121
     contribution rate for the employer shall be reduced to 9% plus the applicable social
             122      contribution rate; or
             123          (iii) if under Subsection (4)(a)(i) the overall contribution rate calculation for a new
             124      employer is less than 1.1%, the overall contribution rate for the new employer shall be
             125      increased to 1.1%.
             126          (b) Beginning January 1, 2012, an employer's overall contribution rate is:
             127          (i) except as provided in Subsection (4)(b)(ii) or (iii), the employer's basic contribution
             128      rate multiplied by the reserve factor established under Subsection (3)(b), calculated to four
             129      decimal places, disregarding any remaining fraction, plus the social contribution rate
             130      established under Subsection (2), and the result calculated to three decimal places, disregarding
             131      any remaining fraction;
             132          (ii) if under Subsection (4)(b)(i) the overall contribution rate calculation for an
             133      employer is greater than 7% plus the applicable social contribution rate, the overall
             134      contribution rate for the employer shall be reduced to 7% plus the applicable social
             135      contribution rate; or
             136          (iii) if under Subsection (4)(b)(i) the overall contribution rate calculation for a new
             137      employer is less than 1.1%, the overall contribution rate for the new employer shall be
             138      increased to 1.1%.
             139          (c) The overall contribution rate described under this Subsection (4) does not include
             140      the addition of any penalty applicable to an employer:
             141          (i) as a result of delinquency in the payment of contributions as provided in Subsection
             142      (9)[.]; or
             143          [(d) The overall contribution rate does not include the addition of any penalty
             144      applicable to an employer]
             145          (ii) that is assessed a penalty rate under Subsection 35A-4-304 (5)(a).
             146          (5) (a) Except as otherwise provided in [Subsection (9), each new employer shall pay a
             147      contribution rate] this section, the basic contribution rate for a new employer is based on the
             148      average benefit cost rate experienced by employers of the major industry, as defined by
             149      department rule, to which the new employer belongs[, the basic contribution rate to be
             150      determined as follows:].
             151          [(a)] (b) Except as provided in Subsection (5)[(b)](c), by January 1 of each year, the



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             152
     basic contribution rate to be used in computing [the] a new employer's overall contribution rate
             153      under Subsection (4) is the benefit cost rate [which] that is the greater of:
             154          (i) the amount calculated by dividing the total benefit costs charged back to both active
             155      and inactive employers of the same major industry for the last two fiscal years by the total
             156      taxable wages paid by those employers that were paid during the same time period, computed
             157      to four decimal places, disregarding [the] any remaining fraction[, if any]; or
             158          (ii) 1%.
             159          [(b)] (c) If the major industrial classification assigned to a new employer is an industry
             160      for which a benefit cost rate does not exist because the industry has not operated in the state or
             161      has not been covered under this chapter, the employer's basic contribution rate [shall be] is
             162      5.4%. This basic contribution rate is used in computing the employer's overall contribution
             163      rate under Subsection (4).
             164          (6) Notwithstanding any other provision of this chapter, and except as provided in
             165      Subsection (7), if an employing unit that moves into this state is declared to be a qualified
             166      employer because it has sufficient payroll and benefit cost experience under another state, a
             167      rate shall be computed on the same basis as a rate is computed for all other employers subject
             168      to this chapter if that unit furnishes adequate records on which to compute the rate.
             169          (7) An employer who begins to operate in this state after having operated in another
             170      state shall be assigned the maximum overall contribution rate until the employer acquires
             171      sufficient experience in this state to be considered a "qualified employer" if the employer is:
             172          (a) regularly engaged as a contractor in the construction, improvement, or repair of
             173      buildings, roads, or other structures on lands;
             174          (b) generally regarded as being a construction contractor or a subcontractor specialized
             175      in some aspect of construction; or
             176          (c) required to have a contractor's license or similar qualification under Title 58,
             177      Chapter 55, Utah Construction Trades Licensing Act, or the equivalent in laws of another state.
             178          (8) (a) If an employer acquires the business or all or substantially all the assets of
             179      another employer and the other employer had discontinued operations upon the acquisition or
             180      transfers its trade or business, or a portion of its trade or business, under Subsection
             181      35A-4-304 (3)(a):
             182          (i) for purposes of determining and establishing the acquiring party's qualifications for



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             183
     an experience rating classification, the payrolls of both employers during the qualifying period
             184      shall be jointly considered in determining the period of liability with respect to:
             185          (A) the filing of contribution reports;
             186          (B) the payment of contributions; and
             187          (C) [after January 1, 1985,] the benefit costs of both employers;
             188          (ii) the transferring employer shall be divested of the transferring employer's
             189      unemployment experience provided the transferring employer had discontinued operations, but
             190      only to the extent as defined under Subsection 35A-4-304 (3)(c); and
             191          (iii) if an employer transfers its trade or business, or a portion of its trade or business,
             192      as defined under Subsection 35A-4-304 (3), the transferring employer may not be divested of its
             193      employer's unemployment experience.
             194          (b) An employing unit or prospective employing unit that acquires the unemployment
             195      experience of an employer shall, for all purposes of this chapter, be an employer as of the date
             196      of acquisition.
             197          (c) Notwithstanding Section 35A-4-310 , when a transferring employer, as provided in
             198      Subsection (8)(a), is divested of the employer's unemployment experience by transferring all of
             199      the employer's business to another and by ceasing operations as of the date of the transfer, the
             200      transferring employer shall cease to be an employer, as defined by this chapter, as of the date of
             201      transfer.
             202          (9) (a) [A rate of less than 8% shall be effective January 1 of any contribution year on
             203      or after January 1, 1985, but before January 1, 1988, and a] A rate of less than the maximum
             204      overall contribution rate [on or after January 1, 1988,] is effective only [with respect to] for
             205      new employers and to those qualified employers who, except for amounts due under division
             206      determinations that have not become final, paid all contributions prescribed by the division
             207      [with respect to] for the four consecutive calendar quarters in the fiscal year immediately
             208      preceding the computation date [on or after January 1, 1985].
             209          (b) Notwithstanding Subsections (1), (5), (6), and (8), [on or after January 1, 1988,] an
             210      employer who fails to pay all contributions prescribed by the division [with respect to] for the
             211      four consecutive calendar quarters in the fiscal year immediately preceding the computation
             212      date, except for amounts due under determinations that have not become final, shall pay a
             213      contribution rate equal to the overall contribution rate determined under the experience rating



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             214
     provisions of this chapter, plus a surcharge of 1% of wages.
             215          (c) An employer who pays all required contributions shall, for the current contribution
             216      year, be assigned a rate based upon the employer's own experience as provided under the
             217      experience rating provisions of this chapter effective the first day of the calendar quarter in
             218      which the payment was made.
             219          (d) Delinquency in filing contribution reports may not be the basis for denial of a rate
             220      less than the maximum contribution rate.
             221          (10) If an employer makes a contribution payment based on the overall contribution
             222      rate in effect at the time the payment was made and a provision of this section retroactively
             223      reduces the overall contribution rate for that payment, the division:
             224          (a) may not directly refund the difference between what the employer paid and what
             225      the employer would have paid under the new rate; and
             226          (b) shall allow the employer to make an adjustment to a future contribution payment to
             227      offset the difference between what the employer paid and what the employer would have paid
             228      under the new rate.
             229          Section 2. Section 35A-4-304 is amended to read:
             230           35A-4-304. Special provisions regarding transfers of unemployment experience
             231      and assignment rates.
             232          (1) As used in this section:
             233          (a) "Knowingly" means having actual knowledge of or acting with deliberate ignorance
             234      or reckless disregard for the prohibition involved.
             235          (b) "Person" has the meaning given that term by Section 7701(a)(1) of the Internal
             236      Revenue Code of 1986.
             237          (c) "Trade or business" includes the employer's workforce.
             238          (d) "Violate or attempt to violate" includes intent to evade, misrepresentation, or
             239      willful nondisclosure.
             240          (2) Notwithstanding any other provision of this chapter, Subsections (3) and (4) shall
             241      apply regarding assignment of rates and transfers of unemployment experience.
             242          (3) (a) If an employer transfers its trade or business, or a portion of its trade or
             243      business, to another employer and, at the time of the transfer, there is common ownership,
             244      management, or control of the employers, then the unemployment experience attributable to



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             245
     each employer shall be combined into a common experience rate calculation.
             246          (b) The contribution rates of the employers shall be recalculated and made effective
             247      upon the date of the transfer of trade or business as determined by division rule in accordance
             248      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             249          (c) (i) If one or more of the employers is a qualified employer at the time of the
             250      transfer, then all employing units that are party to a transfer described in Subsection (3)(a) of
             251      this section shall be assigned an overall contribution rate under Subsection 35A-4-303 (4)[(d)],
             252      using combined unemployment experience rating factors, for the rate year during which the
             253      transfer occurred and for the subsequent three rate years.
             254          (ii) If none of the employing units is a qualified employer at the time of the transfer,
             255      then all employing units that are party to the transfer described in Subsection (3)(a) shall be
             256      assigned the highest overall contribution rate applicable at the time of the transfer to any
             257      employer who is party to the acquisition for the rate year during which the transfer occurred
             258      and for subsequent rate years until the time when one or more of the employing units is a
             259      qualified employer.
             260          (iii) Once one or more employing units described in Subsection (3)(c)(ii) is a qualified
             261      employer, all the employing units shall be assigned an overall rate under Subsection
             262      35A-4-303 (4)[(d)], using combined unemployment experience rating factors for subsequent
             263      rate years, not to exceed three years following the year of the transfer.
             264          (d) The transfer of some or all of an employer's workforce to another employer shall be
             265      considered a transfer of its trade or business when, as the result of the transfer, the transferring
             266      employer no longer performs trade or business with respect to the transferred workforce, and
             267      the trade or business is now performed by the employer to whom the workforce is transferred.
             268          (4) (a) Whenever a person is not an employer under this chapter at the time it acquires
             269      the trade or business of an employer, the unemployment experience of the acquired business
             270      may not be transferred to that person if the division finds that the person acquired the business
             271      solely or primarily for the purpose of obtaining a lower rate of contributions.
             272          (b) The person shall be assigned the applicable new employer rate under Subsection
             273      35A-4-303 (5).
             274          (c) In determining whether the business was acquired solely or primarily for the
             275      purpose of obtaining a lower rate of contributions, the division shall use objective factors



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             276
     which may include:
             277          (i) the cost of acquiring the business;
             278          (ii) whether the person continued the business enterprise of the acquired business;
             279          (iii) how long the business enterprise was continued; or
             280          (iv) whether a substantial number of new employees were hired for performance of
             281      duties unrelated to the business activity conducted prior to acquisition.
             282          (5) (a) If a person knowingly violates or attempts to violate Subsection (3) or (4) or any
             283      other provision of this chapter related to determining the assignment of a contribution rate, or if
             284      a person knowingly advises another person in a way that results in a violation of any of those
             285      subsections or provisions, the person is subject to the following penalties:
             286          (i) (A) If the person is an employer, then the employer shall be assigned an overall
             287      contribution rate of 5.4% for the rate year during which the violation or attempted violation
             288      occurred and for the subsequent rate year.
             289          (B) If the person's business is already at 5.4% for any year, or if the amount of increase
             290      in the person's rate would be less than 2% for that year, then a penalty surcharge of
             291      contributions of 2% of taxable wages shall be imposed for the rate year during which the
             292      violation or attempted violation occurred and for the subsequent rate year.
             293          (ii) (A) If the person is not an employer, the person shall be subject to a civil penalty of
             294      not more than $5,000.
             295          (B) The fine shall be deposited in the penalty and interest account established under
             296      Section 35A-4-506 .
             297          (b) (i) In addition to the penalty imposed by Subsection (5)(a), a violation of this
             298      section may be prosecuted as unemployment insurance fraud.
             299          (ii) The determination of the degree of an offense shall be measured by the total value
             300      of all contributions avoided or reduced or contributions sought to be avoided or reduced by the
             301      unlawful conduct as applied to the degrees listed under Subsection 76-8-1301 (2)(a).
             302          (6) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             303      division shall make rules to identify the transfer or acquisition of a business for purposes of this
             304      section.
             305          (7) This section shall be interpreted and applied in a manner that meets the minimum
             306      requirements contained in any guidance or regulations issued by the United States Department



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             307
     of Labor.
             308          Section 3. Section 35A-4-305 is amended to read:
             309           35A-4-305. Collection of contributions -- Unpaid contributions to bear interest --
             310      Offer to compromise.
             311          (1) (a) Contributions unpaid on the date on which they are due and payable, as
             312      prescribed by the division, shall bear interest at the rate of 1% per month from and after that
             313      date until payment plus accrued interest is received by the division.
             314          (b) (i) Contribution reports not made and filed by the date on which they are due as
             315      prescribed by the division are subject to a penalty to be assessed and collected in the same
             316      manner as contributions due under this section equal to 5% of the contribution due if the failure
             317      to file on time was not more than 15 days, with an additional 5% for each additional 15 days or
             318      fraction thereof during which the failure continued, but not to exceed 25% in the aggregate and
             319      not less than $25 with respect to each reporting period.
             320          (ii) If a report is filed after the required time and it is shown to the satisfaction of the
             321      division or its authorized representative that the failure to file was due to a reasonable cause
             322      and not to willful neglect, no addition shall be made to the contribution.
             323          (c) (i) If contributions are unpaid after 10 days from the date of the mailing or personal
             324      delivery by the division or its authorized representative, of a written demand for payment, there
             325      shall attach to the contribution, to be assessed and collected in the same manner as
             326      contributions due under this section, a penalty equal to 5% of the contribution due.
             327          (ii) A penalty may not attach if within 10 days after the mailing or personal delivery,
             328      arrangements for payment have been made with the division, or its authorized representative,
             329      and payment is made in accordance with those arrangements.
             330          (d) The division shall assess as a penalty a service charge, in addition to any other
             331      penalties that may apply, in an amount not to exceed the service charge imposed by Section
             332      7-15-1 for dishonored instruments if:
             333          (i) any amount due the division for contributions, interest, other penalties or benefit
             334      overpayments is paid by check, draft, order, or other instrument; and
             335          (ii) the instrument is dishonored or not paid by the institution against which it is drawn.
             336          (e) Except for benefit overpayments under Subsection 35A-4-405 (5), benefit
             337      overpayments, contributions, interest, penalties, and assessed costs, uncollected three years



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             338
     after they become due, may be charged as uncollectible and removed from the records of the
             339      division if:
             340          (i) no assets belonging to the liable person and subject to attachment can be found; and
             341          (ii) in the opinion of the division there is no likelihood of collection at a future date.
             342          (f) Interest and penalties collected in accordance with this section shall be paid into the
             343      Special Administrative Expense Account created by Section 35A-4-506 .
             344          (g) Action required for the collection of sums due under this chapter is subject to the
             345      applicable limitations of actions under Title 78B, Chapter 2, Statutes of Limitations.
             346          (2) (a) If an employer fails to file a report when prescribed by the division for the
             347      purpose of determining the amount of the employer's contribution due under this chapter, or if
             348      the report when filed is incorrect or insufficient or is not satisfactory to the division, the
             349      division may determine the amount of wages paid for employment during the period or periods
             350      with respect to which the reports were or should have been made and the amount of
             351      contribution due from the employer on the basis of any information it may be able to obtain.
             352          (b) The division shall give written notice of the determination to the employer.
             353          (c) The determination is considered correct unless:
             354          (i) the employer, within 10 days after mailing or personal delivery of notice of the
             355      determination, applies to the division for a review of the determination as provided in Section
             356      35A-4-508 ; or
             357          (ii) unless the division or its authorized representative of its own motion reviews the
             358      determination.
             359          (d) The amount of contribution determined under Subsection (2)(a) is subject to
             360      penalties and interest as provided in Subsection (1).
             361          (3) (a) If, after due notice, an employer defaults in the payment of contributions,
             362      interest, or penalties on the contributions, or a claimant defaults in a repayment of benefit
             363      overpayments and penalties on the overpayments, the amount due shall be collectible by civil
             364      action in the name of the division, and the employer adjudged in default shall pay the costs of
             365      the action.
             366          (b) Civil actions brought under this section to collect contributions, interest, or
             367      penalties from an employer, or benefit overpayments and penalties from a claimant shall be:
             368          (i) heard by the court at the earliest possible date; and



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             369
         (ii) entitled to preference upon the calendar of the court over all other civil actions
             370      except:
             371          (A) petitions for judicial review under this chapter; and
             372          (B) cases arising under the workers' compensation law of this state.
             373          (c) (i) (A) To collect contributions, interest, or penalties, or benefit overpayments and
             374      penalties due from employers or claimants located outside Utah, the division may employ
             375      private collectors providing debt collection services outside Utah.
             376          (B) Accounts may be placed with private collectors only after the employer or claimant
             377      has been given a final notice that the division intends to place the account with a private
             378      collector for further collection action.
             379          (C) The notice shall advise the employer or claimant of the employer's or claimant's
             380      rights under this chapter and the applicable rules of the department.
             381          (ii) (A) A private collector may receive as compensation up to 25% of the lesser of the
             382      amount collected or the amount due, plus the costs and fees of any civil action or postjudgment
             383      remedy instituted by the private collector with the approval of the division.
             384          (B) The employer or claimant shall be liable to pay the compensation of the collector,
             385      costs, and fees in addition to the original amount due.
             386          (iii) A private collector is subject to the federal Fair Debt Collection Practices Act, 15
             387      U.S.C. Sec. 1692 et seq.
             388          (iv) (A) A civil action may not be maintained by a private collector without specific
             389      prior written approval of the division.
             390          (B) When division approval is given for civil action against an employer or claimant,
             391      the division may cooperate with the private collector to the extent necessary to effect the civil
             392      action.
             393          (d) (i) Notwithstanding Section 35A-4-312 , the division may disclose the contribution,
             394      interest, penalties or benefit overpayments and penalties, costs due, the name of the employer
             395      or claimant, and the employer's or claimant's address and telephone number when any
             396      collection matter is referred to a private collector under Subsection (3)(c).
             397          (ii) A private collector is subject to the confidentiality requirements and penalty
             398      provisions provided in Section 35A-4-312 and Subsection 76-8-1301 (4), except to the extent
             399      disclosure is necessary in a civil action to enforce collection of the amounts due.



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             400
         (e) An action taken by the division under this section may not be construed to be an
             401      election to forego other collection procedures by the division.
             402          (4) (a) In the event of a distribution of an employer's assets under an order of a court
             403      under the laws of Utah, including a receivership, assignment for benefits of creditors,
             404      adjudicated insolvency, composition, or similar proceedings, contributions then or thereafter
             405      due shall be paid in full prior to all other claims except taxes and claims for wages of not more
             406      than $400 to each claimant, earned within five months of the commencement of the
             407      proceeding.
             408          (b) If an employer commences a proceeding in the Federal Bankruptcy Court under a
             409      chapter of 11 U.S.C. 101 et seq., as amended by the Bankruptcy Abuse Prevention and
             410      Consumer Protection Act of 2005, contributions, interest, and penalties then or thereafter due
             411      shall be entitled to the priority provided for taxes, interest, and penalties in the Bankruptcy
             412      Abuse Prevention and Consumer Protection Act of 2005.
             413          (5) (a) In addition and as an alternative to any other remedy provided by this chapter
             414      and provided that no appeal or other proceeding for review provided by this chapter is then
             415      pending and the time for taking it has expired, the division may issue a warrant in duplicate,
             416      under its official seal, directed to the sheriff of any county of the state, commanding the sheriff
             417      to levy upon and sell the real and personal property of a delinquent employer or claimant found
             418      within the sheriff's county for the payment of the contributions due, with the added penalties,
             419      interest, or benefit overpayment and penalties, and costs, and to return the warrant to the
             420      division and pay into the fund the money collected by virtue of the warrant by a time to be
             421      specified in the warrant, not more than 60 days from the date of the warrant.
             422          (b) (i) Immediately upon receipt of the warrant in duplicate, the sheriff shall file the
             423      duplicate with the clerk of the district court in the sheriff's county.
             424          (ii) The clerk shall enter in the judgment docket, in the column for judgment debtors,
             425      the name of the delinquent employer or claimant mentioned in the warrant, and in appropriate
             426      columns the amount of the contribution, penalties, interest, or benefit overpayment and
             427      penalties, and costs, for which the warrant is issued and the date when the duplicate is filed.
             428          (c) The amount of the docketed warrant shall:
             429          (i) have the force and effect of an execution against all personal property of the
             430      delinquent employer; and



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             431
         (ii) become a lien upon the real property of the delinquent employer or claimant in the
             432      same manner and to the same extent as a judgment duly rendered by a district court and
             433      docketed in the office of the clerk.
             434          (d) After docketing, the sheriff shall:
             435          (i) proceed in the same manner as is prescribed by law with respect to execution issued
             436      against property upon judgments of a court of record; and
             437          (ii) be entitled to the same fees for the sheriff's services in executing the warrant, to be
             438      collected in the same manner.
             439          (6) (a) Contributions imposed by this chapter are a lien upon the property of an
             440      employer liable for the contribution required to be collected under this section who shall sell
             441      out the employer's business or stock of goods or shall quit business, if the employer fails to
             442      make a final report and payment on the date subsequent to the date of selling or quitting
             443      business on which they are due and payable as prescribed by rule.
             444          (b) (i) An employer's successor, successors, or assigns, if any, are required to withhold
             445      sufficient of the purchase money to cover the amount of the contributions and interest or
             446      penalties due and payable until the former owner produces a receipt from the division showing
             447      that they have been paid or a certificate stating that no amount is due.
             448          (ii) If the purchaser of a business or stock of goods fails to withhold sufficient purchase
             449      money, the purchaser is personally liable for the payment of the amount of the contributions
             450      required to be paid by the former owner, interest and penalties accrued and unpaid by the
             451      former owner, owners, or assignors.
             452          (7) (a) If an employer is delinquent in the payment of a contribution, the division may
             453      give notice of the amount of the delinquency by registered mail to all persons having in their
             454      possession or under their control, any credits or other personal property belonging to the
             455      employer, or owing any debts to the employer at the time of the receipt by them of the notice.
             456          (b) A person notified under Subsection (7)(a) shall neither transfer nor make any other
             457      disposition of the credits, other personal property, or debts until:
             458          (i) the division has consented to a transfer or disposition; or
             459          (ii) 20 days after the receipt of the notice.
             460          (c) All persons notified under Subsection (7)(a) shall, within five days after receipt of
             461      the notice, advise the division of credits, other personal property, or other debts in their



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             462
     possession, under their control or owing by them, as the case may be.
             463          (8) (a) (i) Each employer shall furnish the division necessary information for the proper
             464      administration of this chapter and shall include wage information for each employee, for each
             465      calendar quarter.
             466          (ii) The information shall be furnished at a time, in the form, and to those individuals
             467      as the department may by rule require.
             468          (b) (i) Each employer shall furnish each individual worker who is separated that
             469      information as the department may by rule require, and shall furnish within 48 hours of the
             470      receipt of a request from the division a report of the earnings of any individual during the
             471      individual's base-period.
             472          (ii) The report shall be on a form prescribed by the division and contain all information
             473      prescribed by the division.
             474          (c) (i) For each failure by an employer to conform to this Subsection (8) the division
             475      shall, unless good cause is shown, assess a $50 penalty if the filing was not more than 15 days
             476      late.
             477          (ii) If the filing is more than 15 days late, the division shall assess an additional penalty
             478      of $50 for each 15 days, or a fraction of the 15 days that the filing is late, not to exceed $250
             479      per filing.
             480          (iii) The penalty is to be collected in the same manner as contributions due under this
             481      chapter.
             482          (d) (i) The division shall prescribe rules providing standards for determining which
             483      contribution reports shall be filed on magnetic or electronic media or in other machine-readable
             484      form.
             485          (ii) In prescribing these rules, the division:
             486          (A) may not require an employer to file contribution reports on magnetic or electronic
             487      media unless the employer is required to file wage data on at least 250 employees during any
             488      calendar quarter or is an authorized employer representative who files quarterly tax reports on
             489      behalf of 100 or more employers during any calendar quarter;
             490          (B) shall take into account, among other relevant factors, the ability of the employer to
             491      comply at reasonable cost with the requirements of the rules; and
             492          (C) may require an employer to post a bond for failure to comply with the rules



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             493
     required by this Subsection (8)(d).
             494          (9) (a) (i) An employer liable for payments in lieu of contributions shall file
             495      Reimbursable Employment and Wage Reports.
             496          (ii) The reports are due on the last day of the month that follows the end of each
             497      calendar quarter unless the division, after giving notice, changes the due date.
             498          (iii) A report postmarked on or before the due date is considered timely.
             499          (b) (i) Unless the employer can show good cause, the division shall assess a $50
             500      penalty against an employer who does not file Reimbursable Employment and Wage Reports
             501      within the time limits set out in Subsection (9)(a) if the filing was not more than 15 days late.
             502          (ii) If the filing is more than 15 days late, the division shall assess an additional penalty
             503      of $50 for each 15 days, or a fraction of the 15 days that the filing is late, not to exceed $250
             504      per filing.
             505          (iii) The division shall assess and collect the penalties referred to in this Subsection
             506      (9)(b) in the same manner as prescribed in Sections 35A-4-309 and 35A-4-311 .
             507          (10) If a person liable to pay a contribution or benefit overpayment imposed by this
             508      chapter neglects or refuses to pay it after demand, the amount, including any interest, additional
             509      amount, addition to contributions, or assessable penalty, together with any additional accruable
             510      costs, shall be a lien in favor of the division upon all property and rights to property, whether
             511      real or personal belonging to the person.
             512          (11) (a) The lien imposed by Subsection (10) arises at the time the assessment, as
             513      defined in the department rules, is made and continues until the liability for the amount
             514      assessed, or a judgment against the taxpayer arising out of the liability, is satisfied.
             515          (b) (i) The lien imposed by Subsection (10) is not valid as against a purchaser, holder
             516      of a security interest, mechanics' lien holder, or judgment lien creditor until the division files a
             517      warrant with the clerk of the district court.
             518          (ii) For the purposes of this Subsection (11)(b):
             519          (A) "Judgment lien creditor" means a person who obtains a valid judgment of a court
             520      of record for recovery of specific property or a sum certain of money, and who in the case of a
             521      recovery of money, has a perfected lien under the judgment on the property involved. A
             522      judgment lien does not include inchoate liens such as attachment or garnishment liens until
             523      they ripen into a judgment. A judgment lien does not include the determination or assessment



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             524
     of a quasi-judicial authority, such as a state or federal taxing authority.
             525          (B) "Mechanics' lien holder" means any person who has a lien on real property, or on
             526      the proceeds of a contract relating to real property, for services, labor, or materials furnished in
             527      connection with the construction or improvement of the property. A person has a lien on the
             528      earliest date the lien becomes valid against subsequent purchasers without actual notice, but not
             529      before the person begins to furnish the services, labor, or materials.
             530          (C) "Person" means:
             531          (I) an individual;
             532          (II) a trust;
             533          (III) an estate;
             534          (IV) a partnership;
             535          (V) an association;
             536          (VI) a company;
             537          (VII) a limited liability company;
             538          (VIII) a limited liability partnership; or
             539          (IX) a corporation.
             540          (D) "Purchaser" means a person who, for adequate and full consideration in money or
             541      money's worth, acquires an interest, other than a lien or security interest, in property which is
             542      valid under state law against subsequent purchasers without actual notice.
             543          (E) "Security interest" means any interest in property acquired by contract for the
             544      purpose of securing payment or performance of an obligation or indemnifying against loss or
             545      liability. A security interest exists at any time:
             546          (I) the property is in existence and the interest has become protected under the law
             547      against a subsequent judgment lien arising out of an unsecured obligation; and
             548          (II) to the extent that, at that time, the holder has parted with money or money's worth.
             549          (12) (a) Except in cases involving a violation of unemployment compensation
             550      provisions under Section 76-8-1301 , Subsection 35A-4-304 (5), or Subsection 35A-4-405 (5),
             551      and at the discretion of the division, the division may accept an offer in compromise from an
             552      employer or claimant to reduce past due debt arising from contributions or benefit
             553      overpayments imposed under this chapter.
             554          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the



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             555
     division shall make rules for allowing an offer in compromise provided under Subsection
             556      (12)(a).
             557          Section 4. Effective date.
             558          If approved by two-thirds of all the members elected to each house, this bill takes effect
             559      upon approval by the governor, or the day following the constitutional time limit of Utah
             560      Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
             561      the date of veto override.





Legislative Review Note
    as of 1-20-12 9:47 AM


Office of Legislative Research and General Counsel


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