00 HOUSE BILL NO. 242 01 "An Act relating to the deposit of certain penalties collected under the unemployment 02 insurance program; requiring an employing unit with a change in ownership, 03 management, or control to notify the Department of Labor and Workforce Development 04 of the ownership change; regarding the unemployment contribution rate of an 05 employing unit; and defining 'business' for purposes of statutes setting unemployment 06 contribution rates; establishing the crime of obtaining an unemployment rate by 07 deception; and providing for an effective date." 08 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 09  * Section 1. AS 23.20.130(d) is amended to read: 10 (d) The training and building fund consists of all interest and penalties 11 collected under AS 23.20.185, 23.20.190, [AND] 23.20.195, and 23.20.297 and all 12 sums recovered on official bond for losses sustained by the fund. Training and 13 building fund money shall be deposited in the clearing account of the unemployment 01 compensation fund for clearance only, and does not become a part of the fund. The 02 unobligated amount in the training and building fund in excess of $100,000 on the 03 close of business of the 30th day following the last day of each fiscal year shall be 04 transferred within 20 days to this state's account in the unemployment trust fund. The 05 fund shall be included in the budget submitted to the legislature under AS 37.07 06 (Executive Budget Act). Funds available in the training and building fund shall be 07 expended upon the direction of the department, with the approval of the governor, 08 when it appears to the governor that the expenditure is necessary for but not limited to 09 (1) the proper administration of this chapter if no federal funds are 10 available for the specific purpose for which the expenditure is to be made, and if the 11 funds are not substituted for appropriations from federal funds that would be made 12 available in the absence of those funds; 13 (2) the proper administration of this chapter, if appropriations from 14 federal funds have been requested but not yet received, and the training and building 15 fund will be reimbursed upon receipt of the requested federal appropriation; 16 (3) [REPEALED 17 (4)] the purposes specified in AS 23.20.075;  18 (4) the purposes of administering AS 23.20.297. 19  * Sec. 2. AS 23.20 is amended by adding a new section to read: 20 Sec. 23.20.293. Requirement to notify the department of a business  21 change and acquisitions. An employing unit that has a change in ownership, 22 management, or control, or that succeeds to or acquires all or part of another 23 employing unit's trade or business, shall notify the department in writing in 24 accordance with regulations adopted by the department. 25  * Sec. 3. AS 23.20.295(d) is amended to read: 26 (d) This section does not apply to an acquisition, transfer of a trade or  27 business, or transfer of an employers' workforce conducting the trade or business 28 if the acquisition or transfer is determined by the commissioner 29 (1) to have been primarily for the purpose of obtaining a more 30 favorable rate of contributions under AS 23.20.280 - 23.20.310, 31 (2) to be inequitable to the parties, [OR] 01 (3) to be contrary to the public interest, or  02 (4) to be a violation of 42 U.S.C. 503(k) (SUTA Dumping  03 Prevention Act of 2004). 04  * Sec. 4. AS 23.20 is amended by adding a new section to read: 05 Sec. 23.20.297. Special standards addressing transfers of experience and  06 assignment of rates. (a) The following standards apply regarding assignment of 07 rates and transfers of experience. For the purposes of AS 23.20.295(d)(1) and (4), 08 (1) if an employer transfers its trade or business, its workforce 09 conducting the trade or business, or a portion of that trade, business, or workforce, to 10 another employer and, at the time of the transfer, there is substantially common 11 ownership, management, or control of the two employers, then the unemployment 12 experience attributable to the transferred trade, business, or workforce is transferred to 13 the employer to whom that trade, business, or workforce is transferred; the rates of 14 both employers are recalculated and made effective immediately upon the date of the 15 transfer; 16 (2) if a person who is not an employer at the time the person acquires 17 the trade, business, or workforce of an employer, the unemployment experience of the 18 acquired trade, business, or workforce may not be transferred to that person if the 19 commissioner finds that the person acquired the trade, business, or workforce in order 20 to obtain a lower rate of contributions; instead, the person is assigned the applicable 21 new employer rate under AS 23.20.170(b). 22 (b) An employer who knowingly or recklessly violates or attempts to violate 23 (a) of this section or any other provision of this chapter related to determining the 24 assignment of a contribution rate, or fails to notify the department of a trade, business, 25 or workforce change or acquisition in order to obtain a more favorable rate of 26 contributions, is not eligible for a rate determination under AS 23.20.280 - 23.20.310. 27 The employer shall pay one of the following as assigned by the department: 28 (1) contributions at the highest rate provided for the rate year of the 29 violation and for the three succeeding rate years; or 30 (2) if the employer's trade, business, or workforce is already at the 31 highest rate for the rate year of the violation, contributions at the highest rate for the 01 three succeeding rate years and a cash penalty of two percent of taxable wages for the 02 rate year of the violation and three succeeding rate years; subject to appropriation, any 03 cash penalty collected under this paragraph shall be deposited into the training and 04 building fund established under AS 23.20.130. 05 (c) A person who is not an employer and who knowingly or recklessly advises 06 another person or employer to transfer or acquire a trade, business, or workforce under 07 the provisions of this section in order to obtain a more favorable rate of contributions 08 in violation of (a) of this section is subject to a civil penalty of not more than $5,000. 09 Subject to appropriation, a penalty collected under this subsection shall be deposited 10 into the training and building fund established under AS 23.20.130. 11 (d) The department may interpret and apply this section in such a manner as to 12 meet the minimum requirements by the United States Department of Labor. 13  * Sec. 5. AS 23.20 is amended by adding a new section to read: 14 Sec. 23.20.299. Obtaining an unemployment contribution rate by  15 deception. (a) A person who violates AS 23.20.297(b) or (c) commits the crime of 16 obtaining an unemployment contribution rate by deception. 17 (b) A person commits the crime of obtaining an unemployment contribution 18 rate by deception in the first degree if the value of the difference between the rate that 19 had been assigned to the trade, business, or workforce and the rate assigned as a result 20 of the violation is $25,000 or more. Obtaining an unemployment contribution rate by 21 deception in the first degree is a class B felony. 22 (c) A person commits the crime of obtaining an unemployment contribution 23 rate by deception in the second degree if the value of the difference between the rate 24 that had been assigned to the trade, business, or workforce and the rate assigned as a 25 result of the violation is $500 or more but less than $25,000. Obtaining an 26 unemployment contribution rate by deception in the second degree is a class C felony. 27 (d) A person commits the crime of obtaining an unemployment contribution 28 rate by deception in the third degree if the value of the difference between the rate that 29 had been assigned to the trade, business, or workforce and the rate assigned as a result 30 of the violation is $50 or more but less than $500. Obtaining an unemployment 31 contribution rate by deception in the third degree is a class A misdemeanor. 01 (e) A person commits the crime of obtaining an unemployment contribution 02 rate by deception in the fourth degree if the value of the difference between the rate 03 that had been assigned to the trade, business, or workforce and the rate assigned as a 04 result of the violation is less than $50. Obtaining an unemployment contribution rate 05 by deception in the fourth degree is a class B misdemeanor. 06 (f) A person who attempts to commit the crime of obtaining an unemployment 07 contribution rate by deception commits the crime of attempt under AS 11.31.100. 08  * Sec. 6. AS 23.20.310 is amended by adding new paragraphs to read: 09 (8) "business" means a trade or business or a part of the trade or 10 business; 11 (9) "knowingly" has the meaning given in AS 11.81.900; 12 (10) "recklessly" has the meaning given in AS 11.81.900. 13  * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 14 read: 15 TRANSITION: REGULATIONS. The Department of Labor and Workforce 16 Development may proceed to adopt regulations necessary to implement the changes made by 17 this Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), but not 18 before the effective date of the statutory change. 19  * Sec. 8. Section 7 of this Act takes effect immediately under AS 01.10.070(c). 20  * Sec. 9. Except as provided in sec. 8 of this Act, this Act takes effect January 1, 2006.