Enrolled SB 306: Requiring an employing unit with a change in ownership, management, or control or similar change to notify the Department of Labor and Workforce Development of the change; relating to the unemployment contribution rate of an employing unit; defining "business" for purposes of statutes setting unemployment contribution rates; establishing the crime of obtaining an unemployment rate by deception; and providing for an effective date.
00Enrolled SB 306 01 Requiring an employing unit with a change in ownership, management, or control or similar 02 change to notify the Department of Labor and Workforce Development of the change; relating 03 to the unemployment contribution rate of an employing unit; defining "business" for purposes 04 of statutes setting unemployment contribution rates; establishing the crime of obtaining an 05 unemployment rate by deception; and providing for an effective date. 06 _______________ 07 * Section 1. AS 23.20 is amended by adding a new section to read: 08 Sec. 23.20.293. Requirement to notify the department of a business change 09 and acquisitions. (a) An employing unit that has a change in ownership, management, 10 or control, or that succeeds to or acquires all or part of another employing unit's trade 11 or business, shall notify the department in writing in accordance with regulations 12 adopted by the department.
01 (b) For the purposes of this section, "a change in ownership, management, or 02 control" means a change of person, entity, or responsible party required by law to pay 03 unemployment insurance contributions. 04 * Sec. 2. AS 23.20.295(d) is amended to read: 05 (d) This section does not apply to an acquisition, transfer of a trade or 06 business, or transfer of an employers' workforce conducting the trade or business 07 if the acquisition or transfer is determined by the commissioner 08 (1) to have been primarily for the purpose of obtaining a more 09 favorable rate of contributions under AS 23.20.280 - 23.20.310; [,] 10 (2) to be inequitable to the parties; [, OR] 11 (3) to be contrary to the public interest; or 12 (4) to be a violation of 42 U.S.C. 503(k) (SUTA Dumping 13 Prevention Act of 2004). 14 * Sec. 3. AS 23.20 is amended by adding a new section to read: 15 Sec. 23.20.297. Special standards addressing transfers of experience and 16 assignment of rates. (a) The following standards apply regarding assignment of rates 17 and transfers of experience. For the purposes of AS 23.20.295(d)(1) and (4), 18 (1) if an employer transfers its trade or business, its workforce 19 conducting the trade or business, or a portion of that trade, business, or workforce, to 20 another employer and, at the time of the transfer, there is substantially common 21 ownership, management, or control of the two employers, then the unemployment 22 experience attributable to the transferred trade, business, or workforce is transferred to 23 the employer to whom that trade, business, or workforce is transferred; the rates of 24 both employers are recalculated and made effective immediately upon the date of the 25 transfer; 26 (2) if a person is not an employer at the time the person acquires the 27 trade, business, or workforce of an employer, the unemployment experience of the 28 acquired trade, business, or workforce may not be transferred to that person if the 29 commissioner finds that the person acquired the trade, business, or workforce in order 30 to obtain a lower rate of contributions; instead, the person is assigned the applicable 31 new employer rate under AS 23.20.170(b).
01 (b) An employer who knowingly or recklessly violates or attempts to violate, 02 or who advises another employer to violate, (a) of this section or any other provision 03 of this chapter related to determining the assignment of a contribution rate, or fails to 04 notify the department of a trade, business, or workforce change or acquisition in order 05 to obtain a more favorable rate of contributions, is not eligible for a rate determination 06 under AS 23.20.280 - 23.20.310. The employer shall pay one of the following as 07 assigned by the department: 08 (1) contributions at the highest rate provided for the rate year of the 09 violation and for the three succeeding rate years; or 10 (2) if the employer's trade, business, or workforce is already at the 11 highest rate for the rate year of the violation, contributions at the highest rate for the 12 three succeeding rate years and a cash penalty of two percent of taxable wages for the 13 rate year of the violation and three succeeding rate years. 14 (c) A person who knowingly or recklessly advises another person or employer 15 to transfer or acquire a trade, business, or workforce under the provisions of this 16 section in order to obtain a more favorable rate of contributions in violation of (a) of 17 this section is subject to a civil penalty of not more than $5,000. 18 (d) The department may interpret and apply this section in such a manner as to 19 meet the minimum requirements by the United States Department of Labor. 20 * Sec. 4. AS 23.20 is amended by adding a new section to read: 21 Sec. 23.20.299. Obtaining an unemployment contribution rate by 22 deception. (a) A person who violates AS 23.20.297(b) or (c) commits the crime of 23 obtaining an unemployment contribution rate by deception. 24 (b) A person commits the crime of obtaining an unemployment contribution 25 rate by deception in the first degree if the value of the difference between the rate that 26 had been assigned to the trade, business, or workforce and the rate assigned as a result 27 of the violation is $25,000 or more. Obtaining an unemployment contribution rate by 28 deception in the first degree is a class B felony. 29 (c) A person commits the crime of obtaining an unemployment contribution 30 rate by deception in the second degree if the value of the difference between the rate 31 that had been assigned to the trade, business, or workforce and the rate assigned as a
01 result of the violation is $500 or more but less than $25,000. Obtaining an 02 unemployment contribution rate by deception in the second degree is a class C felony. 03 (d) A person commits the crime of obtaining an unemployment contribution 04 rate by deception in the third degree if the value of the difference between the rate that 05 had been assigned to the trade, business, or workforce and the rate assigned as a result 06 of the violation is $50 or more but less than $500. Obtaining an unemployment 07 contribution rate by deception in the third degree is a class A misdemeanor. 08 (e) A person commits the crime of obtaining an unemployment contribution 09 rate by deception in the fourth degree if the value of the difference between the rate 10 that had been assigned to the trade, business, or workforce and the rate assigned as a 11 result of the violation is less than $50. Obtaining an unemployment contribution rate 12 by deception in the fourth degree is a class B misdemeanor. 13 (f) A person who attempts to commit the crime of obtaining an unemployment 14 contribution rate by deception commits the crime of attempt under AS 11.31.100. 15 * Sec. 5. AS 23.20.310 is amended by adding new paragraphs to read: 16 (8) "business" means a trade or business or a part of the trade or 17 business; 18 (9) "knowingly" has the meaning given in AS 11.81.900; 19 (10) "recklessly" has the meaning given in AS 11.81.900. 20 * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 21 read: 22 TRANSITION: REGULATIONS. The Department of Labor and Workforce 23 Development may proceed to adopt regulations necessary to implement the changes made by 24 this Act. The regulations take effect under AS 44.62 (Administrative Procedure Act), but not 25 before the effective date of the statutory change. 26 * Sec. 7. Sections 1, 2, and 4 of this Act and AS 23.20.297(a) - (c), enacted by sec. 3 of this 27 Act, take effect July 1, 2006. 28 * Sec. 8. Sections 5 and 6 of this Act and AS 23.20.297(d), enacted by sec. 3 of this Act, 29 take effect immediately under AS 01.10.070(c).