SB 178: "An Act relating to contributions, interest, penalties, and payments under the Alaska Employment Security Act; and providing for an effective date."
00 SENATE BILL NO. 178 01 "An Act relating to contributions, interest, penalties, and payments under the Alaska 02 Employment Security Act; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 05 to read: 06 LEGISLATIVE FINDINGS AND INTENT. (a) The legislature finds that 07 (1) P.L. 106-544 (Consolidated Appropriations Act, 2001) amended 26 U.S.C. 08 3301 - 3311 (Federal Unemployment Tax Act (FUTA)) to require certified state 09 unemployment insurance programs to provide federally recognized tribes and their wholly 10 owned subdivisions, subsidiaries, or businesses the option to be a reimbursable employer; 11 (2) the state's unemployment insurance program has been certified by the 12 United States Department of Labor; 13 (3) as a certified program, the Department of Labor and Workforce 14 Development receives federal funds to administer its unemployment insurance program;
01 (4) because this state has a certified program, Alaska employers receive a tax 02 credit of up to 90 percent of the federal unemployment tax that employers are required to pay; 03 (5) to maintain its certified status, this state must conform AS 23.20 (Alaska 04 Employment Security Act) with the requirements of FUTA; 05 (6) failure to bring AS 23.20 (Alaska Employment Security Act) into 06 compliance with federal legislation could result in the loss of approximately $20,000,000 in 07 administrative funding from FUTA and the loss of approximately $111,000,000 in FUTA tax 08 credits to employers in this state; 09 (7) of the 33 states that have federally recognized tribes, Alaska is the only 10 state that has not yet passed conforming legislation; and 11 (8) to bring AS 23.20 (Alaska Employment Security Act) into conformity with 12 FUTA, the legislature finds that it is necessary to amend AS 23.20 to allow federally 13 recognized tribes and their wholly owned subdivisions, subsidiaries, or businesses the option 14 to be a reimbursable employer. 15 (b) It is the intent of the legislature that this Act not alter or expand in any way the 16 governmental relationship between federally recognized tribes and the state. 17 * Sec. 2. AS 23.20.277(b) is amended to read: 18 (b) At the end of each calendar quarter, or at the end of any other period as 19 determined by the department, the department shall bill each government entity, 20 federally recognized tribe, nonprofit organization, or group of nonprofit 21 organizations that has elected to make payments in place of contributions, for benefits 22 paid during the quarter or other prescribed period that are attributable to service in the 23 employ of the government entity, federally recognized tribe, nonprofit organization, 24 or group. In the case of nonprofit organizations and groups of nonprofit organizations, 25 the amount billed is an amount equal to the full amount of regular benefits plus 26 extended benefits that are not reimbursable by the federal government. In the case of a 27 government entity or federally recognized tribe, the amount billed is an amount 28 equal to the full amount of the regular benefits plus the full amount of the extended 29 benefits paid. 30 * Sec. 3. AS 23.20.277(e) is amended to read: 31 (e) At the end of each taxable year, the department shall determine whether
01 the total of payments for the year made by a nonprofit organization or group of 02 nonprofit organizations is less than, or in excess of, the total amount of regular 03 benefits plus extended benefits not reimbursable by the federal government paid to 04 individuals during the taxable year based on wages attributable to service in the 05 employ of the nonprofit organization or group. In the case of a government entity or 06 federally recognized tribe that has elected to make payments under this section, the 07 department shall determine whether the total of payments for the year is less than, or 08 in excess of, the total amount of regular benefits plus the total amount of extended 09 benefits as determined in this subsection. If [EACH ORGANIZATION OR GROUP 10 WHOSE] total payments for the taxable year are less than the amount so determined, 11 the employer is liable for payment of the unpaid balance to the fund in accordance 12 with (f) of this section. If the total payments exceed the amount so determined for the 13 taxable year, all or part of the excess may, at the discretion of the department, be 14 refunded from the fund or retained in the fund as part of the payments that may be 15 required for the next taxable year. 16 * Sec. 4. AS 23.20.277(f) is amended to read: 17 (f) Payment of any bill rendered under (b) or (c) of this section shall be made 18 not later than 30 days after the bill was mailed to the last known address of the 19 nonprofit organization, group of nonprofit organizations, government entity, or 20 federally recognized tribe or was otherwise delivered to it, unless there has been an 21 application for review and redetermination in accordance with (h) of this section. 22 * Sec. 5. AS 23.20.277(g) is amended to read: 23 (g) Payments made by any nonprofit organization, group of nonprofit 24 organizations, government entity, or federally recognized tribe under the 25 provisions of this section may not be deducted or deductible, in whole or in part, from 26 the remuneration of an individual [INDIVIDUALS] in the employ of the 27 organization, group of organizations, government entity, or federally recognized 28 tribe; nor may contributions be required of an employee on the basis of wages paid to 29 that employee for services performed by the employee in employment for a nonprofit 30 organization, group of nonprofit organizations, government entity, or federally 31 recognized tribe that [WHICH] makes an election to become liable for payments in
01 place of contributions under AS 23.20.276 - 23.20.278 [AS 23.20.276], and the wages 02 are paid during the period of election. 03 * Sec. 6. AS 23.20.277(h) is amended to read: 04 (h) The amount due, specified in a bill from the department, is conclusive on 05 the employer [ORGANIZATION] unless, not later than 30 days after the bill was 06 mailed to its last address of record or otherwise delivered to it, the employer 07 [ORGANIZATION] files an application for redetermination by the department, setting 08 out the grounds for the application. The department shall promptly review and 09 reconsider the bill and shall [THEREAFTER] issue a redetermination in any case in 10 which an application for redetermination has been filed. Any redetermination is 11 conclusive on the employer [ORGANIZATION] unless, not later than 30 days after 12 the redetermination was mailed to its last address of record or otherwise delivered to 13 it, the employer [ORGANIZATION] files an appeal to the commissioner, setting out 14 the grounds for the appeal. Proceedings on appeal to the commissioner from the 15 amount of a bill rendered under this subsection or a redetermination of the amount 16 shall be in accordance with AS 23.20.410 - 23.20.470. 17 * Sec. 7. AS 23.20.277(j) is amended to read: 18 (j) At the discretion of the department, a nonprofit organization, group of 19 nonprofit organizations, government entity, or federally recognized tribe that 20 elects to become liable for payments in place of contributions under AS 23.20.276 - 21 23.20.278 [AS 23.20.276] is required, within 30 days after the effective date of its 22 election, to execute and file with the department a surety bond approved by the 23 department or it may elect instead to deposit with the department money or securities. 24 The amount of the bond or deposit shall be determined by the department in 25 accordance with regulations adopted by the department. 26 * Sec. 8. AS 23.20.277(k) is amended to read: 27 (k) If a nonprofit organization, group of nonprofit organizations, 28 government entity, or federally recognized tribe is delinquent in making payments 29 in place of contributions as required under this section and after having been given 30 notice, the department shall [MAY] terminate that employer's [ORGANIZATION'S] 31 election to make payments in place of contributions until a time as provided by
01 regulations adopted by the department [AS OF THE BEGINNING OF THE NEXT 02 TAXABLE YEAR, AND THE TERMINATION IS EFFECTIVE FOR THAT AND 03 THE NEXT TAXABLE YEAR]. 04 * Sec. 9. AS 23.20.277(l) is amended to read: 05 (l) Each employer that is liable for payments in place of contributions shall 06 pay to the department for the fund the amount of regular benefits plus the extended 07 benefits not reimbursable by the federal government paid to individuals that are 08 attributable to service in the employ of that employer. However, a government entity 09 or federally recognized tribe that has elected to make payments under this section is 10 liable for the amount of regular benefits plus the full amount of extended benefits that 11 are attributable to service in the employ of that entity or tribe. If benefits paid to an 12 individual are based on wages paid by more than one employer and one or more of 13 these employers is liable for payments in place of contributions, the amount payable to 14 the fund by each employer that is liable for payments shall be determined by the 15 department in accordance with regulations adopted by the department. 16 * Sec. 10. AS 23.20.277 is amended by adding a new subsection to read: 17 (m) The department may not approve an election to make payments in place 18 of contributions if, at the time of the election, a nonprofit organization, group of 19 nonprofit organizations, government entity, or federally recognized tribe is delinquent 20 in making contributions under AS 23.20.165. 21 * Sec. 11. AS 23.20.278 is amended to read: 22 Sec. 23.20.278. Financing benefits paid to employees of the state, [AND 23 ITS] political subdivisions of the state, or a federally recognized tribe. A federally 24 recognized tribe or political subdivision or a department, division, or other agency of 25 the state subject to this chapter, under AS 23.20.525(a)(14) [AS 23.20.525(a)(4) AND 26 (14)], shall pay contributions under the provisions of AS 23.20.165, unless it elects to 27 reimburse the department for the unemployment compensation fund according to the 28 provisions applicable to nonprofit organizations, government entities, or federally 29 recognized tribes under AS 23.20.276 and 23.20.277. 30 * Sec. 12. AS 23.20.381(j) is amended to read: 31 (j) Benefits based on services described in (e) and (h) of this section shall be
01 denied under (e), (h), and (i) of this section to an individual who performed those 02 services in an educational institution while in the employ of an educational service 03 agency. In this subsection, "educational service agency" means a governmental 04 agency, [OR] governmental entity, or federally recognized tribe that is established 05 and operated exclusively for the purpose of providing services to one or more 06 educational institutions [INSTITUTION]. 07 * Sec. 13. AS 23.20.520(10) is amended to read: 08 (10) "employing unit" means one or more departments or other 09 agencies of the state, a political subdivision of the state, a federally recognized tribe, 10 an individual, or a type of organization, partnership, association, trust, estate, joint 11 trust company, insurance company, or domestic or foreign corporation, or the receiver, 12 referee in bankruptcy, trustee, or successor of one of these, or the legal representative 13 of a deceased person, that [WHICH] has or [, AFTER JANUARY 1, 1937,] had one 14 or more individuals performing service for it in the state; an individual performing 15 services in the state for an employing unit that [WHICH] maintains two or more 16 separate establishments in the state is considered as employed by a single employing 17 unit for the purposes of this chapter; notwithstanding any provision in this chapter, any 18 employing unit that [WHICH] employs individuals whose services must be covered 19 by the unemployment insurance laws of this state [AFTER DECEMBER 31, 1971] as 20 a condition of approval of the unemployment insurance laws of this state under 21 26 U.S.C. 3304(a) (Internal Revenue Code of 1954), as amended, will be considered 22 an employer as to those individuals and is subject to contributions on all wages paid 23 [AFTER DECEMBER 31, 1971,] or reimbursement payments to cover benefits paid 24 based on services performed [AFTER DECEMBER 31, 1971], depending on the 25 applicable law; 26 * Sec. 14. AS 23.20.520(14) is amended to read: 27 (14) "institution of higher education" means an educational institution 28 that [WHICH] 29 (A) admits as regular students only individuals having a 30 certificate of graduation from a high school, or the recognized equivalent of a 31 high school graduation certificate;
01 (B) is legally authorized in the state in which it is located to 02 provide a program of education beyond high school; 03 (C) provides an educational program for which it awards a 04 bachelor's or higher degree, or provides a program that [WHICH] is 05 acceptable for full credit toward either degree, a program of postgraduate or 06 postdoctoral studies, or a program of training to prepare students for gainful 07 employment in a recognized occupation; and 08 (D) is operated by a federally recognized tribe or is a public 09 or other nonprofit institution; 10 * Sec. 15. AS 23.20.520 is amended by adding a new paragraph to read: 11 (22) "federally recognized tribe" 12 (A) means a tribe that is recognized by the United States 13 Secretary of the Interior to exist as an Indian tribe under 25 U.S.C. 479a 14 (Federally Recognized Indian Tribe List Act of 1994); 15 (B) includes any subdivision, subsidiary, or business enterprise 16 wholly owned by a federally recognized tribe. 17 * Sec. 16. AS 23.20.525(a)(14) is amended to read: 18 (14) service performed [AFTER DECEMBER 31, 1977,] in the 19 employ of this state or any of its instrumentalities or any political subdivision of this 20 state or any of its instrumentalities or any instrumentality of any of the foregoing and 21 one or more other states or political subdivisions, or in the employ of a federally 22 recognized tribe, if that service is excluded from "employment" under 26 U.S.C. 23 3306(c)(7) (Federal Unemployment Tax Act, Internal Revenue Code) and is not 24 excluded from "employment" under AS 23.20.526(d) [AS 23.20.526(d)(8)]; 25 * Sec. 17. AS 23.20.526(d) is amended to read: 26 (d) For the purposes of AS 23.20.525(a)(6) and (14) [AS 23.20.525(a)(4) - (6) 27 and (14)], the term "employment" does not apply to service performed 28 (1) by a duly ordained, commissioned, or licensed minister of a church 29 in the exercise of the person's ministry or by a member of a religious order in the 30 exercise of duties required by the order; 31 (2) in a facility conducted for the purpose of carrying out a program of
01 rehabilitation for individuals whose earning capacity is impaired by age or physical or 02 mental deficiency or injury or providing remunerative work for individuals who, 03 because of their impaired physical or mental capacity, cannot be readily absorbed in 04 the competitive labor market by an individual receiving the rehabilitation or 05 remunerative work; 06 (3) as part of an unemployment work-relief or work-training program 07 assisted or financed in whole or in part by any federal agency or any agency of a state 08 or political subdivision of the state or of a federally recognized tribe, by an 09 individual receiving work relief or work training; 10 (4) for a state hospital by an inmate of a prison or correctional 11 institution; 12 (5) in the employ of a school, college, or university if the service is 13 performed by a student who is enrolled and is regularly attending classes at the school, 14 college, or university; 15 (6) by an individual under the age of 22 who is enrolled at a nonprofit 16 or public educational institution that normally maintains a regular faculty and 17 curriculum and normally has a regularly organized body of students in attendance at 18 the place where its educational activities are carried on as a student in a full-time 19 program, taken for credit at the institution, that combines academic instruction with 20 work experience if the service is an integral part of the program and the institution has 21 so certified to the employer, except that this paragraph does not apply to service 22 performed in a program established for or on behalf of an employer or group of 23 employers; 24 (7) in the employ of a hospital if the service is performed by a patient 25 of the hospital, as defined in AS 23.20.520; 26 (8) in the employ of the state or a political subdivision of the state if 27 the service is performed by an individual in the exercise of duties 28 (A) as a judicial officer, the governor, the lieutenant governor, 29 a person hired or appointed as the head or deputy head of a department in the 30 executive branch, a person hired or appointed as the director of a division of a 31 department in the executive branch, an assistant to the governor, a chair or
01 member of a state commission or board, state investment officers and the state 02 comptroller in the Department of Revenue, an appointed or elected municipal 03 officer, any other elected official, the fiscal analyst of the legislative finance 04 division, the legislative auditor of the legislative audit division, the executive 05 director of the Legislative Affairs Agency, and the directors of the divisions 06 within the Legislative Affairs Agency; 07 (B) as a member of the Alaska Army National Guard or Alaska 08 Air National Guard or Alaska Naval Militia; 09 (C) as an employee serving on only a temporary basis in case 10 of fire, storm, snow, earthquake, flood, or similar emergency; or 11 (D) as an election official or election worker if the amount of 12 remuneration received by the individual during the calendar year for services 13 as an election official or election worker is less than $1,000; 14 (9) in the employ of 15 (A) a church or a convention or association of churches; or 16 (B) an organization that is operated primarily for religious 17 purposes and that is operated, supervised, controlled, or principally supported 18 by a church or a convention or association of churches; 19 (10) in the employ of a federally recognized tribe in this state if the 20 service is performed by an individual in the exercise of duties as an officer of the 21 federally recognized tribe and meets the requirements of 26 U.S.C. 3309(b)(3)(E) 22 (Federal Unemployment Tax Act, Internal Revenue Code). 23 * Sec. 18. The uncodified law of the State of Alaska is amended by adding a new section to 24 read: 25 REVISOR'S CHANGES. The revisor of statutes shall change the heading of 26 AS 23.20.277 from "Reimbursement payments by nonprofit organizations and government 27 entities" to "Reimbursement payments by nonprofit organizations, government entities, and 28 federally recognized tribes." 29 * Sec. 19. This Act takes effect immediately under AS 01.10.070(c).