Bill Text: MI HB4239 | 2009-2010 | 95th Legislature | Engrossed
Bill Title: Employment security; administration; persons to whom agency information may be disclosed and assessment of solvency tax; revise. Amends secs. 11 & 19a of 1936 (Ex Sess) PA 1 (MCL 421.11 & 421.19a).
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2009-03-12 - Assigned Pa 1'09 With Immediate Effect [HB4239 Detail]
Download: Michigan-2009-HB4239-Engrossed.html
HB-4239, As Passed Senate, March 10, 2009
SUBSTITUTE FOR
HOUSE BILL NO. 4239
A bill to amend 1936 (Ex Sess) PA 1, entitled
"Michigan employment security act,"
by amending sections 11 and 19a (MCL 421.11 and 421.19a), section
11 as amended by 2005 PA 182 and section 19a as amended by 1983 PA
247.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 11. (a) In the administration of this act, the commission
shall cooperate with the appropriate agency of the United States
under the social security act. The commission shall make reports,
in a form and containing information as the appropriate agency of
the United States may require, and shall comply with the provisions
that the appropriate agency of the United States prescribes to
assure the correctness and verification of the reports. The
commission, subject to this act, shall comply with the regulations
prescribed by the appropriate agency of the United States relating
to the receipt or expenditure of the sums that are allotted and
paid to this state for the purpose of assisting in the
administration of this act. As used in this section, "social
security act" means the social security act, chapter 531, 49 Stat.
620.
(b)(1) Information obtained from any employing unit or
individual
pursuant to the administration of this act , and
determinations
as to the benefit rights of any individual shall be
held
are confidential and shall not be disclosed or open to
public
inspection other than to public employees and public officials in
the performance of their official duties under this act and to
agents or contractors of those public officials, including those
described
in subdivision (viii), in
any manner revealing that
reveals
the individual's or the employing unit's identity or any
identifying particular about any individual or any past or present
employing unit or that could foreseeably be combined with other
publicly available information to reveal identifying particulars.
However, all of the following apply:
(i) Information in the commission's possession that might
affect a claim for worker's disability compensation under the
worker's disability compensation act of 1969, 1969 PA 317, MCL
418.101 to 418.941, shall be available to interested parties as
defined in R 421.201 of the Michigan administrative code,
regardless of whether the commission is a party to an action or
proceeding arising under that act.
(ii) Any information in the commission's possession that may
affect a claim for benefits or a charge to an employer's experience
House Bill No. 4239 (H-1) as amended February 26, 2009
account shall be available to interested parties as defined in R
421.201 of the Michigan administrative code, and to their agents,
if their agents provide the unemployment insurance agency with a
written authorization of representation from the party represented.
A written authorization of representation is not required in any of
the following circumstances:
(A) If the request is made by an attorney who is retained [by an
interested party and files an appearance for purposes related to a claim
for unemployment benefits.
]
(B) If the request is made by an elected official performing
constituent services and the elected official presents reasonable
evidence that the identified individual authorized the disclosure.
(C) If the request is made by a third party who is not acting
as an agent for an interested party and the third party presents a
release from an interested party for the information. The release
shall be signed by an interested party; specify the information to
be released and all individuals who may receive the information;
and state the specific purpose for which the information is sought,
that files of the state may be accessed to obtain the information,
and that the information sought will only be used for the purpose
indicated. The purpose specified in the release shall be limited to
that of providing a service or benefit to the individual signing
the release or carrying out administration or evaluation of a
public program to which the release pertains.
(iii) Except as provided in this act, the information and
determinations shall not be used in any action or proceeding before
any court or administrative tribunal unless the commission is a
party to or a complainant in the action or proceeding, or unless
used for the prosecution of fraud, civil proceeding, or other legal
proceeding in the programs indicated in subdivision (2).
(iv) Any report or statement, written or verbal, made by any
person to the commission, any member of the commission, or to any
person engaged in administering this act is a privileged
communication, and a person, firm, or corporation shall not be held
liable for slander or libel on account of a report or statement.
The records and reports in the custody of the commission shall be
available for examination by the employer or employee affected.
(v) Subject to restrictions that the commission prescribes by
rule, information in the commission's possession may be made
available
to any agency of this or state,
any other state, or any
federal
agency , charged
with the administration of an unemployment
compensation law or the maintenance of a system of public
employment offices; the bureau of internal revenue of the United
States department of the treasury; the bureau of the census of the
economics and statistics administration of the United States
department of commerce; or the social security administration of
the United States department of health and human services.
(vi) Information obtained in connection with the administration
of the employment service may be made available to persons or
agencies for purposes appropriate to the operation of a public
employment service. Subject to restrictions that the commission
prescribes by rule, the commission may also make that information
available to agencies of other states that are responsible for the
administration of public assistance to unemployed workers, and to
the departments of this state. Information so released shall be
used only for purposes not inconsistent with the purposes of this
act.
(vii) Upon request, the commission shall furnish to any agency
of the United States charged with the administration of public
works or assistance through public employment, and may furnish to
any state agency similarly charged, the name, address, ordinary
occupation, and employment status of each recipient of benefits and
the recipient's rights to further benefits under this act.
(viii) Subject to restrictions the commission prescribes, by
rule or otherwise, the commission may also make information that it
obtains available for use in connection with research projects of a
public
service nature to colleges,
universities, and public
agencies
of this state for use in connection with research projects
of
a public service nature a
college, university, or agency of this
state that is acting as a contractor or agent of a public official
and conducting research that assists the public official in
carrying out the duties of the office. A person associated with
those institutions or agencies shall not disclose the information
in any manner that would reveal the identity of any individual or
employing unit from or concerning whom the information was obtained
by the commission. The unemployment insurance agency shall enter
into a written, enforceable agreement with the public official that
holds the official responsible for ensuring that the agent or
contractor maintains the confidentiality of the information. If the
agreement is violated, the agreement shall be terminated and the
public official may be subject to penalties equivalent to those
that apply under section 54(f) to a person associated with a
college, university, or public agency who discloses confidential
information.
(ix) The commission may request the comptroller of the currency
of the United States to cause an examination of the correctness of
any return or report of any national banking association rendered
under this act, and may, in connection with the request, transmit
the report or return to the comptroller of the currency of the
United States as provided in section 3305(c) of the internal
revenue
code of 1986, 26 USC 3305 3305(c).
(2) The commission shall disclose to qualified requesting
agencies, upon request, with respect to an identified individual,
information in its records pertaining to the individual's name;
social security number; gross wages paid during each quarter; the
name, address, and federal and state employer identification number
of the individual's employer; any other wage information; whether
an individual is receiving, has received, or has applied for
unemployment benefits; the amount of unemployment benefits the
individual is receiving or is entitled to receive; the individual's
current or most recent home address; whether the individual has
refused an offer of work and if so a description of the job offered
including the terms, conditions, and rate of pay; and any other
information which the qualified requesting agency considers useful
in verifying eligibility for, and the amount of, benefits. For
purposes of this subdivision, "qualified requesting agency" means
any state or local child support enforcement agency responsible for
enforcing child support obligations under a plan approved under
part d of title IV of the social security act, 42 USC 651 to 669b;
the United States department of health and human services for
purposes of establishing or verifying eligibility or benefit
amounts under titles II and XVI of the social security act, 42 USC
401 to 434 and 42 USC 1381 to 1383f; the United States department
of agriculture for the purposes of determining eligibility for, and
amount of, benefits under the food stamp program established under
the food stamp act of 1977, 7 USC 2011 to 2036; and any other state
or local agency of this or any other state responsible for
administering the following programs:
(i) The aid to families with dependent children program under
part a of title IV of the social security act, 42 USC 601 to 619.
(ii) The medicaid program under title XIX of the social
security act, 42 USC 1396 to 1396v.
(iii) The unemployment compensation program under section 3304
of
the internal revenue code of 1954 1986, 26 USC 3304.
(iv) The food stamp program under the food stamp act of 1977, 7
USC 2011 to 2036.
(v) Any state program under a plan approved under title I, X,
XIV, or XVI of the social security act, 42 USC 301 to 306, 42 USC
1201 to 1206, 42 USC 1351 to 1355, and 42 USC 1381 to 1383f.
(vi) Any program administered under the social welfare act,
1939 PA 280, MCL 400.1 to 400.119b.
The information shall be disclosed only if the qualified
requesting agency has executed an agreement with the commission to
obtain the information and if the information is requested for the
purpose of determining the eligibility of applicants for benefits,
or the type and amount of benefits for which applicants are
eligible, under any of the programs listed above or under title II
and XVI of the social security act, 42 USC 401 to 434 and 42 USC
1381 to 1383f; for establishing and collecting child support
obligations from, and locating individuals owing such obligations
which
that are being enforced pursuant to under a
plan described in
section 454 of the social security act, 42 USC 654; or for
investigating or prosecuting alleged fraud under any of these
programs.
The commission shall cooperate with the department of human
services in establishing the computer data matching system
authorized in section 83 of the social welfare act, 1939 PA 280,
MCL 400.83, to transmit the information requested on at least a
quarterly basis. The information shall not be released unless the
qualified requesting agency agrees to reimburse the commission for
the costs incurred in furnishing the information.
In addition to the requirements of this section, except as
later provided in this subdivision, all other requirements with
respect to confidentiality of information obtained in the
administration
of this act shall apply to the use of the
information by the officers and employees of the qualified
requesting agencies, and the sanctions imposed under this act for
improper
disclosure of the information shall be applicable apply
to
those officers and employees. A qualified requesting agency may
redisclose information only to the individual who is the subject of
the information, an attorney or other duly authorized agent
representing the individual if the information is needed in
connection with a claim for benefits against the requesting agency,
or any criminal or civil prosecuting authority acting for or on
behalf of the requesting agency.
The commission is authorized to enter into an agreement with
any qualified requesting agency for the purposes described in this
subdivision.
The agreement or agreements must shall comply with all
federal laws and regulations applicable to such agreements.
(3) The commission shall enable the United States department
of health and human services to obtain prompt access to any wage
and unemployment benefit claims information, including any
information
that might may be useful in locating an absent parent
or an absent parent's employer, for purposes of section 453 of the
social security act, 42 USC 653, in carrying out the child support
enforcement
program under title IV of that the
social security act,
42 USC 601 to 679b. Access to the information shall not be provided
unless the requesting agency agrees to reimburse the commission for
the costs incurred in furnishing the information.
(4) Upon request accompanied by presentation of a consent to
the release of information signed by an individual, the commission
shall disclose to the United States department of housing and urban
development and any state or local public housing agency
responsible for verifying an applicant's or participant's
eligibility for, or level of benefits in, any housing assistance
program administered by the United States department of housing and
urban development, the name, address, wage information, whether an
individual
is receiving, has received, or has made application
applied for unemployment benefits, and the amount of unemployment
benefits the individual is receiving or is entitled to receive
under this act. This information shall be used only to determine an
individual's eligibility for benefits or the amount of benefits to
which an individual is entitled under a housing assistance program
of the United States department of housing and urban development.
The information shall not be released unless the requesting agency
agrees to reimburse the commission for the costs incurred in
furnishing
the information. For purposes of this subsection
subdivision, "public housing agency" means an agency described in
section 3(b)(6) of the United States housing act of 1937, 42 USC
1437a
1437a(b)(6).
(5) The commission may make available to the department of
treasury information collected for the income and eligibility
verification system begun on October 1, 1988 for the purpose of
detection
of detecting potential tax fraud in other areas.
(6) A recipient of confidential information under this act
shall use the disclosed information only for purposes authorized by
law and consistent with an agreement entered into with the
unemployment insurance agency. The recipient shall not redisclose
the information to any other individual or entity without the
written permission of the unemployment insurance agency.
(c)
The commission is authorized to may
enter into agreements
with the appropriate agencies of other states or the federal
government whereby potential rights to benefits accumulated under
the unemployment compensation laws of other states or of the
federal government, or both, may constitute the basis for the
payment of benefits through a single appropriate agency under plans
that the commission finds will be fair and reasonable to all
affected interests and will not result in substantial loss to the
unemployment compensation fund.
(d)(1)
The commission is authorized to may
enter into
reciprocal agreements with the appropriate agencies of other states
or of the federal government adjusting the collection and payment
of contributions by employers with respect to employment not
localized within this state.
(2)
The commission is authorized to may
enter into reciprocal
agreements with agencies of other states administering unemployment
compensation, whereby contributions paid by an employer to any
other state may be received by the other state as an agent acting
for and on behalf of this state to the same extent as if the
contributions had been paid directly to this state if the payment
is remitted to this state. Contributions so received by another
state
shall be deemed considered
contributions, required and paid
under this act as of the date the contributions were received by
the other state. The commission may collect contributions in a like
manner for agencies of other states administering unemployment
compensation and remit the contributions to the agencies under the
terms of the reciprocal agreements.
(e) The commission may make the state's records relating to
the administration of this act available and may furnish to the
railroad retirement board or any other state or federal agency
administering an unemployment compensation law, at the expense of
that board, state, or agency, copies of the records as the railroad
retirement
board deems considers necessary for its purpose.
(f) The commission may cooperate with or enter into agreements
with any agency of another state or of the United States charged
with the administration of any unemployment insurance or public
employment service law.
The
commission may make investigations investigate, secure,
and transmit information, make available services and facilities,
and exercise other powers provided in this act with respect to the
administration
of this act as it deems considers
necessary or
appropriate to facilitate the administration of any unemployment
compensation or public employment service law, and may accept and
utilize information, services, and facilities made available to
this state by the agency charged with the administration of any
other unemployment compensation or public employment service law.
On request of an agency that administers an employment
security law of another state or foreign government and that has
found, in accordance with that law, that a claimant is liable to
repay benefits received under that law, the commission may collect
the amount of the benefits from the claimant to be refunded to the
agency.
In any case in which under this subsection a claimant is
liable to repay any amount to the agency of another state or
foreign government, the amount may be collected by civil action in
the name of the commission acting as agent for the agency. Court
costs shall be paid or guaranteed by the agency of that state.
To the extent permissible under the laws and constitution of
the
United States, the commission is authorized to may enter
into
or cooperate in arrangements whereby facilities and services
provided under this act and facilities and services provided under
the
unemployment compensation law of the Dominion of Canada may be
utilized for the taking of claims and the payment of benefits under
the unemployment compensation law of this state or under a similar
law
of the Dominion of Canada.
Any employer who is not a resident of this state and who
exercises the privilege of having 1 or more individuals perform
service for him or her within this state, and any resident employer
who exercises that privilege and thereafter leaves this state, is
considered to have appointed the secretary of state as his or her
agent and attorney for the acceptance of process in any civil
action under this act. In instituting the action, the commission
shall cause process or notice to be filed with the secretary of
state, and the service shall be sufficient and shall be of the same
force and validity as if served upon the nonresident or absent
employer personally within this state. The commission immediately
shall send notice of the service of process or notice, together
with
a copy thereof, by registered certified
mail, return receipt
requested, to the employer at his or her last known address. The
return receipt, the commission's affidavit of compliance with this
section, and a copy of the notice of service shall be attached to
the original of the process filed in the court in which the civil
action is pending.
The courts of this state shall recognize and enforce
liabilities, as provided in this act, for unemployment compensation
contributions, penalties, and interest imposed by other states
which
that extend a like comity to this state.
The attorney general may commence action in the appropriate
court of any other state or any other jurisdiction of the United
States by and in the name of the commission to collect unemployment
compensation contributions, penalties, and interest finally
determined, redetermined, or decided under this act to be legally
due
this state. The officials of other states which that extend
a
like comity to this state may sue in the courts of this state for
the collection of unemployment compensation contributions,
penalties, and interest, the liability for which has been similarly
established under the laws of the other state or jurisdiction. A
certificate by the secretary of another state under the great seal
of that state attesting the authority of the official or officials
to collect unemployment compensation contributions, penalties, and
interest is conclusive evidence of that authority.
The attorney general may commence action in this state as
agent for or on behalf of any other state to enforce judgments and
established liabilities for unemployment compensation taxes or
contributions, penalties, and interest due the other state if the
other state extends a like comity to this state.
(g) The commission may also enter into reciprocal agreements
with the appropriate and authorized agencies of other states or of
the
federal government whereby remuneration and services , that
determine entitlement to benefits under the unemployment
compensation
law of another state or of the federal government ,
are considered wages and employment for the purposes of sections 27
and 46, if the other state agency or agency of the federal
government has agreed to reimburse the fund for that portion of
benefits paid under this act upon the basis of the remuneration and
services as the commission finds will be fair and reasonable as to
all affected interests. A reciprocal agreement may provide that
wages
and employment , that
determine entitlement to benefits under
this
act , are
considered wages or services on the basis of which
unemployment compensation under the law of another state or of the
federal government is payable; may provide that services performed
by an individual for a single employing unit for which services are
customarily performed by the individual in more than 1 state are
considered services performed entirely within any 1 of the states
in which any part of the individual's service is performed, in
which the individual has his or her residence, or in which the
employing unit maintains a place of business, if there is in effect
as to those services, an election approved by the agency charged
with the administration of the state's unemployment compensation
law,
pursuant to under which all the services performed by the
individual for the employing unit are considered to be performed
entirely within the state; and may provide that the commission will
reimburse other state or federal agencies charged with the
administration of unemployment compensation laws with such
reasonable portion of benefits, paid under the law of any other
state or of the federal government upon the basis of employment and
wages, as the commission finds will be fair and reasonable as to
all affected interests. Reimbursements payable under this
subsection are considered benefits for the purpose of limiting
duration of benefits and for the purposes of sections 20(a) and 26,
and the payments shall be charged to the contributing employer's
experience account for the purposes of sections 17, 18, 19, and 20,
or the reimbursing employer's account under section 13c, 13g, 13i,
or 13l, as applicable. Benefits paid under a combined wage plan
shall be allocated and charged to each employer involved in the
quarter in which the paying state requires reimbursement. Benefits
charged to this state shall be allocated to each employer of this
state who has employed the claimant during the base period of the
paying state in the same ratio that the wages earned by the
claimant during the base period of the paying state in the employ
of the employer bears to the total amount of wages earned by the
claimant in the base period of the paying state in the employ of
all employers of the state. The commission is authorized to make to
other state or federal agencies and receive from other state or
federal agencies reimbursements from or to the fund, in accordance
with
arrangements made pursuant to under
this section.
(h) The commission may enter into any agreement necessary to
cooperate with any agency of the United States charged with the
administration of any program for the payment of primary or
supplemental benefits to individuals recently discharged from the
military services of the United States, and to assist in the
establishing of eligibility and in the payments of benefits under
those programs, and for those purposes may accept and administer
funds made available by the federal government and may accept and
exercise any delegated function under those programs. The
commission shall not enter into any agreement providing for, or
exercise any function connected with, the disbursement of the
state's unemployment trust fund for purposes not authorized by this
act.
(i) The commission may enter into agreements with the
appropriate agency of the United States under which, in accordance
with the laws of the United States, the commission, as agent of the
United States or from funds provided by the United States, provides
for the payment of unemployment compensation or unemployment
allowances of any kind, including the payment of any benefits and
allowances that are made available for manpower development,
training, retraining, readjustment, and relocation. The commission
may receive and disburse funds from the United States or any
appropriate agency of the United States in accordance with any such
agreements.
If the federal enactment providing for unemployment
compensation, training allowance, or relocation payments requires
joint federal-state financing of such payments, the commission may
participate in the programs by using funds appropriated by the
legislature to the extent provided by the legislature for such
programs.
(j)
The commission shall participate in any arrangement which
that provides for the payment of compensation on the basis of
combining an individual's wages and employment covered under this
act with his or her wages and employment covered under the
unemployment compensation laws of other states, if the arrangement
is approved by the United States secretary of labor in consultation
with the state unemployment compensation agencies as reasonably
calculated to assure the prompt and full payment of compensation.
An arrangement shall include provisions for both of the following:
(i) Applying the base period of a single state law to a claim
involving the combining of an individual's wages and employment
covered under 2 or more state unemployment compensation laws.
(ii) Avoiding the duplicate use of wages and employment as a
result of the combining.
(k) In a proceeding before any court, the commission and the
state shall be represented by the attorney general of this state or
attorneys designated by the attorney general. Only the attorney
general or other attorneys designated by the attorney general shall
act as legal counsel for the commission.
Sec. 19a. (1) Except for the first 4 consecutive years of
liability,
a contributing employer shall be is subject to a
solvency tax for a calendar year after 1982 if the employer's
experience account has a negative balance on the June 30 preceding
that calendar year, and if on the June 30 preceding that calendar
year the balance in the unemployment compensation fund is less than
the total amount of unrepaid interest bearing advances from the
federal government to the fund under section 1201 of the social
security
act, 42 U.S.C. USC 1321, or the commission projects that
interest will be due during the calendar year on federal advances
and there will be insufficient solvency tax funds in the contingent
fund to meet the federal interest obligations when due or there are
outstanding advances from the state treasury from the previous year
and any interest thereon and there will be insufficient solvency
tax funds in the contingent fund to repay such advances and
interest.
The solvency tax rate shall be is
in addition to the
employer's
contribution rate and shall not be is not subject to the
limiting provisions of section 19(a)(6).
(2) The solvency tax rate shall be determined for the
respective calendar years as follows:
(a) For the 1983 calendar year, the solvency tax rate shall be
0.5%.
(b) For the 1984 calendar year, the solvency tax rate shall be
1%.
(c) For the 1985 calendar year, the solvency tax rate shall be
calculated in the manner provided in this subdivision. By February
1, 1985, the commission shall estimate the amount of interest due
on federal loans during the 1985 calendar year, without regard to
any deferral permitted under section 1202(b)(3) or (8) of the
social
security act, 42 U.S.C. USC
1322, the amount of funds
required for the unemployment insurance automation project for the
1985 calendar year, and the amount of deferred solvency taxes which
cannot be collected because of employer bankruptcies. The total of
these estimated amounts plus any amounts advanced from the state
treasury under subsection (3) during the 1984 calendar year and any
interest thereon shall be divided by the estimated total taxable
payroll for the 1985 calendar year of all active employers who had
negative balances in their experience accounts as of June 30, 1984.
Total taxable payroll shall be estimated by using the total taxable
payroll
for such those employers for the 12-month period ending
June 30, 1984 and adjusting this figure for any change in the
taxable wage limit for the 1985 calendar year. The solvency tax
rate thus calculated for the 1985 calendar year shall be adjusted
to the next highest 1/10 of 1%, but shall not exceed 2%.
(d) For the 1986 calendar year, the solvency tax rate shall be
calculated in the manner provided in this subdivision. By February
1, 1986, the commission shall estimate the amount of interest due
during the 1986 calendar year on federal loans, without regard to
any
deferral which that may be permitted under section 1202(b)(3)
or
(8) of the social security act, 42 U.S.C. USC 1322, the amount
of funds required for the unemployment insurance automation project
for the 1986 calendar year, and the expected balance on December
31, 1986, if any, of unrepaid interest bearing federal advances.
The total of these amounts plus any amounts advanced from the state
treasury under subsection (3) during the 1985 calendar year and any
interest thereon shall be divided by the estimated total taxable
payroll for the calendar year of all active employers who had
negative balances in their experience accounts as of June 30, 1985.
Total taxable payroll shall be estimated by using the total taxable
payroll
for such those employers for the 12-month period ending on
June 30, 1985 and adjusting this figure for any change in the
taxable wage limit for the 1986 calendar year. The quotient shall
be adjusted to the next highest 1/10 of 1%. If this adjusted
percentage is 0.8% or less, the employer's solvency tax rate for
the 1986 calendar year shall be the adjusted percentage calculated.
If the adjusted percentage is more than 0.8%, the employer's
solvency tax rate shall be calculated in the same manner as the
account building component of the employer's contribution rate as
determined under section 19(a)(4), adjusted to generate aggregate
solvency tax revenues sufficient to pay the interest due during the
year on federal loans, to pay for the unemployment insurance
automation project, to repay the balance of interest bearing loans
by December 31, 1986, and to repay amounts advanced from the state
treasury during the 1985 calendar year and any interest thereon,
but shall not exceed the lesser of 1/4 of the percentage calculated
or 2%.
(e) For calendar years after 1986, the solvency tax rate shall
be calculated as follows:
(i) If there is no balance on December 31, 1986, of unrepaid
interest bearing federal advances, the solvency tax rate, if any,
shall be calculated in the same manner as the account building
component of the employer's contribution rate as determined under
section 19(a)(4), but shall not exceed the lesser of 1/4 of the
percentage calculated or 2%.
(ii) If there is a balance on December 31, 1986, of unrepaid
interest bearing federal advances, the solvency tax rate for the
1987 calendar year and for each calendar year thereafter shall be
calculated in the manner provided in this subparagraph until the
balance of the interest bearing federal advances on December 31,
1986 has been reduced to zero. By February 1 of the calendar year,
the commission shall calculate the sum of (a) the estimated
interest due during the calendar on federal loans, without regard
to any interest deferral which may be permitted under section 1202
of
the social security act, 42 U.S.C. USC 1322, (b) the estimated
amount of funds required for the unemployment insurance automation
project, (c) the remaining balance on December 31 of the preceding
year of the December 31, 1986 balance of unrepaid interest bearing
federal advances, and (d) any amounts advanced from the state
treasury under subsection (3) during the preceding year and any
interest thereon. For purposes of calculating the remaining
balance, any loan repayments during the year shall first be applied
toward reducing the December 31, 1986 loan balance. The amount so
calculated shall be divided by the estimated total taxable payroll
for the calendar year of all active employers who had negative
balances in their experience accounts as of June 30 of the previous
year. Total taxable payroll shall be estimated by using the total
taxable payroll for such employers for the 12-month period ending
June 30 of the previous calendar year and adjusting this figure for
any change in the taxable wage limit for the calendar year. The
quotient shall be adjusted to the next 1/10 of 1%. If this adjusted
percentage is 0.8% or less, an employer's solvency tax rate for
that calendar year shall be the percentage calculated. If the
adjusted percentage is more than 0.8%, the employer's solvency tax
rate shall be calculated in the same manner as the account building
component of the employer's contribution rate as determined under
section 19(a)(4), adjusted to generate sufficient aggregate
solvency tax revenues to pay the interest due during the year on
federal loans, to pay for the unemployment insurance automation
project, to repay the remaining balance of the December 31, 1986
balance of unrepaid federal interest bearing loans, and to repay
advances from the state treasury and any interest due thereon, but
shall not exceed the lesser of 1/4 of the percentage calculated or
2%. For any calendar year after the first calendar year that the
remaining balance of the December 31, 1986 balance of unrepaid
interest bearing federal advances has been reduced to zero by
December 31 of that year, an employer's solvency tax rate shall be
calculated in the same manner as the account building component of
the employer's contribution rate as determined under section
19(a)(4), but shall not exceed the lesser of 1/4 of the percentage
calculated or 2%.
(iii) Notwithstanding subparagraph (i), if there is no interest
bearing federal loan balance on December 31, 1986, but the state
will have interest due during the 1987 calendar year on federal
advances made prior to January 1, 1987, or the state must repay in
the 1987 calendar year any advances made from the state treasury
during the 1986 calendar year, plus any interest thereon, the
employer's solvency tax rate for the 1987 calendar year shall be
calculated in the same manner as in subparagraph (ii). If there is
no federal interest bearing loan balance on December 31, 1986, and
there will be no federal or state interest due during the 1987
calendar year based on advances made prior to January 1, 1987, but
on June 30, 1986, the balance in the unemployment compensation fund
was less than the total amount of unrepaid interest bearing federal
advances, the employer's solvency tax rate for the 1987 calendar
year shall be zero.
(3) Solvency taxes shall become due and payable in the manner,
and at the times, specified for contributions in rules promulgated
by the commission. However, if the state is permitted to defer
interest payments due during a calendar year under section
1202(b)(3) or (8) of the social security act, 42 USC 1322, payment
of the solvency tax may likewise be deferred by an employer and
paid in installments in a manner prescribed by the commission. If a
deferral of interest payment is subsequently disallowed by the
United States department of labor, either prospectively or
retroactively, amounts of solvency taxes deferred under this
section shall become immediately due and payable. Further, if the
commission estimates that the solvency taxes to be collected by
September 30 of the calendar year will be insufficient to meet the
interest obligations due during that calendar year, the percentages
of amounts of solvency taxes deferred in any year shall be reduced
by the commission in an amount sufficient to meet the interest
obligations due in that calendar year. Furthermore, if the amount
of solvency taxes to be collected by the time the federal interest
obligations are due in any year are insufficient to meet the
obligations when due, the commission shall recommend to the
legislature that it appropriate an amount sufficient to meet the
interest obligations due. Any amount so appropriated and used to
pay federal interest obligations, and interest due on such state
appropriation, if any, shall be repaid to the state as soon as
possible from the solvency tax revenues in the contingent fund.
(4) Amounts obtained pursuant to this section shall be paid
into the contingent fund created under section 10 and, except for
solvency taxes transferred to the unemployment compensation fund as
provided in this subsection, shall not be credited to the
employer's experience account. Amounts collected from solvency
taxes which are transferred to the unemployment compensation fund
and used to repay federal advances to the unemployment compensation
fund shall be credited to the employers' experience accounts by
June 30 of the year following the calendar year in which the
transfer occurred. The amount to be credited to an employer's
account shall be determined by the commission, but shall reasonably
reflect each employer's pro rata share of the amount transferred.
Past due payments of the solvency tax shall be subject to the
interest, penalty, assessment, and collection provisions of section
15. Interest and penalties collected shall be paid into the
contingent fund. Adjustments and refunds of erroneously collected
solvency taxes shall be made in accordance with section 16.
Solvency tax determinations are appealable under the appeal process
provided for review and appeal of determinations under this act.
(5) If any provision of this section prevents the state from
qualifying for any federal interest relief provisions provided
under
section 1202 of the social security act, 42 U.S.C. USC 1322,
or prevents employers in this state from qualifying for the
limitation on the reduction of federal unemployment tax act credits
as provided under section 3302(f) of the federal unemployment tax
act,
26 U.S.C. USC 3302(f), such that provision shall be is invalid
to
the extent necessary to maintain qualification for such the
interest relief provisions and federal unemployment tax credits.
(6) Notwithstanding any other provision of this section, if
interest due during a calendar year on federal advances is forgiven
or postponed under federal law and is no longer due during that
calendar year, no solvency tax shall be assessed against an
employer for that calendar year and any solvency tax already
assessed and collected against an employer before the forgiveness
or postponement of the interest for that calendar year shall be
credited to the employer's experience account.
