March 16, 2011, Introduced by Rep. Somerville and referred to the Committee on Commerce.
A bill to amend 1936 (Ex Sess) PA 1, entitled
"Michigan employment security act,"
by amending section 15 (MCL 421.15), as amended by 1996 PA 498.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 15. (a) Contributions unpaid on the date on which they
are
due and payable, as prescribed by the commission unemployment
agency, shall bear interest at the rate of 1% per month, computed
on
a day to day day-to-day basis for each day the delinquency is
unpaid, from and after that date until payment plus accrued
interest
is received by the commission unemployment
agency. Amounts
illegally obtained or previously withheld from payment and damages
that
are recovered by the commission under section 54(a) and (b)
and
sections 54a to 54c of this act shall bear interest at the rate
of 1% per month, computed on a day-to-day basis for each day the
amounts remain unpaid until payment plus accrued interest is
received. by
the commission. The interest on unpaid contributions,
exclusive of penalties, shall not exceed 50% of the amount of
contributions due at due date. Interest and penalties collected
pursuant to this section shall be paid into the contingent fund,
except that interest allowed on amounts collected under section 62
shall
be paid into the special fraud control fund. The commission
unemployment agency may cancel any interest and any penalty when it
is shown that the failure to pay on or before the last day on which
the tax could have been paid without interest and penalty was not
the result of negligence, intentional disregard of the rules of the
commission
unemployment agency, or fraud.
(b)
The commission unemployment
agency may make assessments
against
an employer, claimant, employee of the commission
unemployment agency, or third party who fails to pay contributions,
reimbursement payments in lieu of contributions, penalties,
forfeitures,
or interest as required by this act. The commission
unemployment
agency shall immediately notify the employer,
claimant,
employee of the commission, or third party of the
assessment
person assessed in writing by first-class mail. An
assessment
by the commission against a claimant, an employee of the
commission,
or a third party under this
subsection shall be made
only for penalties and interest on those penalties for violations
of section 54(a) or (b) or sections 54a to 54c. The assessment,
which
shall constitute a determination, shall be is a final
determination unless the employer, claimant, employee of the
commission
unemployment agency, or third party files with the
commission
an application for a
redetermination of the assessment
in
accordance with section 32a. A review by the commission
unemployment agency or an appeal to a referee or the appeal board
on
the assessment shall does not reopen a question concerning an
employer's liability for contributions or reimbursement payments in
lieu of contributions, unless the employer was not a party to the
proceeding or decision where the basis for the assessment was
determined. An employer may pay an assessment under protest and
file an action to recover the amount paid as provided under
subsection (d). Unless an assessment is paid within 15 days after
it
becomes final, the commission unemployment agency may issue a
warrant
under its official seal for the collection of an the
assessed
amount. required to be paid pursuant
to the assessment.
The
commission unemployment
agency through its authorized
employees, under a warrant issued, may levy upon and sell the
property of the employer that is used in connection with the
employer's business, or that is subject to a notice to withhold,
found within the state, for the payment of the amount of the
contributions including penalties, interests, and the cost of
executing the warrant. Property of the employer used in connection
with
the employer's business shall not be is not exempt from levy
under
the warrant. Wages subject to a notice to withhold shall be
are exempt to the extent the wages are exempt from garnishment
under the laws of this state. The warrant shall be returned to the
commission
unemployment agency together with the money collected by
virtue
of under the warrant within the time specified in the
warrant which shall not be less than 20 or more than 90 days after
the
date of the warrant. The commission unemployment agency shall
proceed
upon the warrant in all respects and with like effect and
in
the same manner as prescribed by
law in respect to executions
issued against property upon judgments by a court of record. The
state,
through the commission unemployment
agency or some other
officer or agent designated by it, may bid for and purchase
property sold under the provisions of this subsection. If an
employer,
claimant, employee of the commission unemployment agency,
or third party, as applicable, is delinquent in the payment of a
contribution, reimbursement payment in lieu of contribution,
penalty, forfeiture, or interest provided for in this act, the
commission
unemployment agency may give notice of the amount of the
delinquency served either personally or by mail, to a person or
legal
entity, including the state and its subdivisions, that to
which the delinquent person or entity owes a debt or that has in
its possession or under its control a credit or other intangible
property
belonging to the employer, claimant, employee of the
commission,
or third party, or who owes a debt to the employer,
claimant,
employee of the commission, or third party at the time of
the
receipt of the notice the
delinquent person or entity. A person
or
legal entity so notified shall not transfer or make a
disposition
dispose of the credit, other intangible property, or
debt without retaining an amount sufficient to pay the amount
specified
in the notice unless the commission unemployment agency
consents to a transfer or disposition or 45 days have elapsed from
the receipt of the notice. A person or legal entity so notified
shall
advise the commission unemployment
agency within 5 days after
receipt of the notice of a credit, other intangible property, or
debt, which is in its possession, under its control, or owed by it.
A person or legal entity that is notified and that transfers or
disposes of credits or personal property in violation of this
section
is liable to the commission unemployment
agency for the
value of the property or the amount of the debts thus transferred
or paid, but not more than the amount specified in the notice. An
amount due a delinquent employer, claimant, employee of the
commission
unemployment agency, or third party subject to a notice
to
withhold shall be paid to the commission unemployment agency
upon service upon the debtor of a warrant issued under this
section.
(c) In addition to the mode of collection provided in
subsection (b), if, after due notice, an employer defaults in
payment of contributions or interest on the contributions, or a
claimant,
employee of the commission unemployment
agency, or third
party defaults in the payment of a penalty or interest on a
penalty,
the commission unemployment
agency may bring an action at
law in a court of competent jurisdiction to collect and recover the
amount of a contribution, and any interest on the contribution, or
the penalty or interest on the penalty, and in addition 10% of the
amount of contributions or penalties found to be due, as damages.
An
employer, claimant, employee of the commission unemployment
agency, or third party adjudged in default shall pay costs of the
action.
An action by the commission unemployment
agency against a
claimant,
employee of the commission unemployment
agency, or third
party under this subsection shall be brought only to recover
penalties and interest on those penalties for violations of section
54(a) or (b) or sections 54a to 54c. Civil actions brought under
this section shall be heard by the court at the earliest possible
date. If a judgment is obtained against an employer for
contributions and an execution on that judgment is returned
unsatisfied, the employer may be enjoined from operating and doing
business in this state until the judgment is satisfied. The circuit
court of the county in which the judgment is docketed or the
circuit court for the county of Ingham may grant an injunction upon
the
petition of the commission unemployment
agency. A copy of the
petition for injunction and a notice of when and where the court
shall act on the petition shall be served on the employer at least
21 days before the court may grant the injunction.
(d) An employer or employing unit improperly charged or
assessed
contributions provided for under this act or a claimant,
employee
of the commission unemployment
agency, or third party
improperly assessed a penalty under this act and who paid the
contributions or penalty under protest within 30 days after the
mailing of the notice of determination of assessment, may recover
the amount improperly collected or paid, together with interest, in
any
proper action against the commission unemployment agency. The
circuit court of the county in which the employer or employing unit
or
claimant, employee of the commission unemployment agency, or
third party resides, or, in the case of an employer or employing
unit, in which is located the principal office or place of business
of
the employer or employing unit, shall have has original
jurisdiction of an action to recover contributions improperly paid
or collected or a penalty improperly assessed whether or not the
charge
or assessment has been reviewed by the commission
unemployment agency or heard or reviewed by a referee or the appeal
board.
The court shall not have has
no jurisdiction of the action
unless
written notice of claim is given to the commission
unemployment agency at least 30 days before the institution of the
action. In an action to recover contributions paid or collected or
penalties
assessed, the court shall allow costs to such an extent
and
in a manner as it may consider it
considers proper. Either
party
to the action shall have the right of may appeal, as is now
provided by law, in other civil actions. An action by a claimant,
employee
of the commission unemployment
agency, or third party
against
the commission unemployment
agency under this subsection
shall be brought only to recover penalties and interest on those
penalties
improperly assessed by the commission unemployment agency
under section 54(a) or (b) or sections 54a to 54c. If a final
judgment is rendered in favor of the plaintiff in an action to
recover the amount of contributions illegally collected or charged,
the
treasurer of the commission unemployment
agency, upon receipt
of a certified copy of the final judgment, shall pay the amount of
contributions illegally collected or charged or penalties assessed
from
the clearing account, and pay interest as may be allowed by
the
court, in an amount not to exceed the actual earnings of the
those
contributions, as
may have been found to have been illegally
collected
or charged, from the contingent
fund.
(e) Except for liens and encumbrances recorded before the
filing of the notice provided for in this section, all
contributions, interest, and penalties payable under this act to
the
commission unemployment
agency from an employer, claimant,
employee
of the commission unemployment
agency, or third party that
neglects
to pay the same when due shall be are a first and prior
lien upon all property and rights to property, real and personal,
belonging
to the employer, claimant, employee of the commission
unemployment
agency, or third party. The lien shall
continue
continues until the liability for that amount or a judgment arising
out of the liability is satisfied or becomes unenforceable by
reason
of lapse of time. The lien shall attach attaches to the
property and rights to property of the employer, claimant, employee
of
the commission unemployment
agency, or third party, whether real
or
personal, from and after the required
filing date that a of the
report
upon which the specific tax is computed. is required by this
act
to be filed. Notice of the lien
shall be recorded in the office
of the register of deeds of the county in which the property
subject to the lien is situated, and the register of deeds shall
receive
the notice for recording. This subsection shall apply
applies only to penalties and interest on those penalties assessed
by
the commission unemployment
agency against a claimant, employee
of
the commission unemployment
agency, or third party for
violations of section 54(a) or (b) or sections 54a to 54c.
If there is a distribution of an employer's assets pursuant to
an order of a court under the laws of this state, including a
receivership, assignment for benefit of creditors, adjudicated
insolvency, composition, or similar proceedings, contributions then
or thereafter due shall be paid in full before all other claims
except for wages and compensation under the worker's disability
compensation
act of 1969, Act No. 317 of the Public Acts of 1969,
being
sections 418.101 to 418.941 of the Michigan Compiled Laws
1969 PA 317, MCL 418.101 to 418.941. In the distribution of estates
of decedents, claims for funeral expenses and expenses of last
sickness shall also be entitled to priority.
(f) An injunction shall not issue to stay proceedings for
assessment or collection of contributions, or interest or penalty
on contributions, levied and required by this act.
(g) A person or employing unit, that acquires the
organization, trade, business, or 75% or more of the assets from an
employing
unit, as a successor defined described
in section 41(2),
is
liable for contributions and interest due to the commission
unemployment agency from the transferor at the time of the
acquisition in an amount not to exceed the reasonable value of the
organization, trade, business, or assets acquired, less the amount
of a secured interest in the assets owned by the transferee that
are entitled to priority. The transferor or transferee who has, not
less than 10 days before the acquisition, requested from the
commission
unemployment agency in writing a statement certifying
the status of contribution liability of the transferor shall be
provided with that statement and the transferee is not liable for
any amount due from the transferor in excess of the amount of
liability computed as prescribed in this subsection and certified
by
the commission unemployment
agency. At least 2 calendar days not
including a Saturday, Sunday, or legal holiday before the
acceptance of an offer, the transferor, or the transferor's real
estate broker or other agent representing the transferor, shall
disclose
to the transferee on a form provided by the commission
unemployment agency, the amounts of the transferor's outstanding
unemployment tax liability, unreported unemployment tax liability,
and the tax payments, tax rates, and cumulative benefit charges for
the most recent 5 years, a listing of all individuals currently
employed by the transferor, and a listing of all employees
separated from employment with the transferor in the most recent 12
months.
This form shall specify such any
other information ,
as
determined
by the commission, as would be the
unemployment agency
determines is required for a transferee to estimate future
unemployment compensation costs based on the transferor's benefit
charge
and tax reporting and payment experience with the commission
unemployment agency. Failure of the transferor, or the transferor's
real estate broker or other agent representing the transferor, to
provide accurate information required by this subsection is a
misdemeanor punishable by imprisonment for not more than 90 days,
or a fine of not more than $2,500.00, or both. In addition, the
transferor, or the transferor's real estate broker or other agent
representing the transferor, is liable to the transferee for any
consequential damages resulting from the failure to comply with
this subsection. However, the real estate broker or other agent is
not liable for consequential damages if he or she exercised good
faith in compliance with the disclosure of information. The remedy
provided
the transferee is not exclusive, and is not to be
construed
to does not reduce any other right or remedy against any
party provided for in this or any other act. Nothing in this
subsection
shall be construed to decrease decreases
the liability
of
the transferee as a successor in interest, or to prevent
prevents the transfer of a rating account balance as provided in
this
act. The foregoing provisions of
this subsection are in
addition
to the remedies the commission unemployment
agency has
against the transferor.
(h) If a part of a deficiency in payment of the employer's
contribution to the fund is due to negligence or intentional
disregard
of the rules of the commission unemployment
agency, but
without intention to defraud, 5% of the total amount of the
deficiency,
in addition to the deficiency and in addition to all
other
interest charges and penalties provided, herein, shall be
assessed,
collected, and paid in the same manner as if it were a
deficiency. If a part of a deficiency is determined in an action at
law to be due to fraud with intent to avoid payment of
contributions to the fund, then the judgment rendered shall include
an amount equal to 50% of the total amount of the deficiency, in
addition
to the deficiency and in addition to all other interest
charges
and penalties. provided herein.
(i) If an employing unit fails to make a report as reasonably
required
by the rules of the commission unemployment
agency
pursuant
to this act, the commission unemployment
agency may make
an
estimate of the liability of
that employing unit from
information
it may obtain obtains and, according to that estimate,
so
made, assess the employing unit for
the contributions,
penalties,
and interest due. The commission unemployment agency
shall
have the power only after not
make an assessment under this
subsection
until after a default continues for 30
days and after
the
commission unemployment
agency has determined that the default
of the employing unit is willful.
(j) An assessment or penalty with respect to contributions
unpaid is not effective for any period before the 3 calendar years
preceding the date of the assessment.
(k) The rights respecting the collection of contributions and
the levy of interest and penalties and damages made available to
the
commission unemployment
agency by this section is are
additional
to other powers and rights vested in the commission in
pursuance
of the unemployment agency
under other provisions of this
act.
The commission is not precluded from exercising unemployment
agency
may exercise any of the collection remedies
provided for by
under this act even though an application for a redetermination or
an appeal is pending final disposition.
(l) A person recording a lien provided for in under this
section shall pay a fee of $2.00 for recording a lien and a fee of
$2.00 for recording a discharge of a lien.
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 96th Legislature are
enacted into law:
(a) Senate Bill No.____ or House Bill No. 4449(request no.
01742'11).
(b) Senate Bill No.____ or House Bill No. 4450(request no.
01743'11).
(c) Senate Bill No.____ or House Bill No. 4448(request no.
01745'11).