Hawaii-2010-HB1129-Introduced

SECTION 1. Section 383-66, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Notwithstanding any other provision of this chapter, the following shall apply regarding assignment of rates and transfers of experience:

(1) If an employing unit transfers its organization, trade, or business, or a portion thereof, to another employing unit and, at the time of the transfer, there is substantially common ownership, management, or control of the two employing units, both employing units shall file a notification of the transfer with the department on a form approved by the department within thirty days after the date of the transfer. The department shall transfer the experience records attributable to the transferred organization, trade, or business to the employing unit to whom the organization, trade, or business is transferred. The rates of both employing units shall be recalculated and made effective beginning with the calendar [~~quarter~~] year immediately following the date of the transfer of the organization, trade, or business;

(2) If a person is not an employing unit as defined in section 383-1 at the time it acquires the organization, trade, or business of another employing unit, both the person and the employing unit shall file a notification of the acquisition with the department on a form approved by the department within thirty days after the date of the acquisition. If the department determines at the time of the acquisition or thereafter, based on objective factors that may include:

(A) The cost of acquiring the organization, trade, or business;

(B) Whether the person continued the activity of the acquired organization, trade, or business;

(D) Whether a substantial number of new employees were hired for performance of duties unrelated to the organization, trade, or business activity conducted prior to the acquisition, that the acquisition was solely or primarily for the purpose of obtaining a lower rate of contribution, the person shall not be assigned the lower rate and shall be assigned the contribution rate for a new or newly covered employer pursuant to subsection (a)(2) instead;

(3) An employing unit or person who is not an employing unit shall be subject to penalties under paragraph (4) or (5) if the employing unit or person who is not an employing unit:

(A) Knowingly violates or attempts to violate this subsection or any other provision of this chapter related to determining the assignment of a contribution rate;

(B) Makes any false statement or representation or fails to disclose a material fact to the department in connection with the transfer or acquisition of an organization, trade, or business; or

(C) Knowingly advises another employing unit or person in a way that results in a violation or attempted violation of this subsection;

(4) If the person is an employing unit:

(A) The employing unit shall be subject to the highest rate assignable under this chapter for the calendar year during which the violation or attempted violation occurred and for the consecutive three calendar years immediately following; or

(B) If the employing unit is already at the highest rate or if the amount of increase in the employing unit's rate would be less than two per cent for the calendar year during which the violation or attempted violation occurred, a penalty equal to contributions of two per cent of taxable wages shall be imposed for the calendar year during which the violation or attempted violation occurred and the consecutive three calendar years immediately following. Any penalty amount collected in excess of the maximum contributions payable at the highest rate shall be deposited in the special unemployment insurance administration fund in accordance with section 383-127;

(5) If the person is not an employing unit, the person shall be subject to a penalty of not more than $5,000. The penalty shall be deposited in the special unemployment insurance administration fund in accordance with section 383-127;

(6) For purposes of this subsection, the following definitions shall apply:

(A) "Knowingly" means having actual knowledge of or acting with deliberate ignorance or reckless disregard for the requirements or prohibition involved;

(B) "Violates or attempts to violate" includes, but is not limited to, intent to evade, misrepresentation, or wilful nondisclosure;

(C) "Person" shall have the same meaning as defined in section [~~6601(a)(1)~~] 7701(a)(1) of the Internal Revenue Code of 1986, as amended; and

(D) "Organization, trade, or business" shall include the employer's workforce;

(7) In addition to the civil penalties imposed by paragraphs (4) and (5), any violation of this section may be prosecuted under sections 383-142 and 383-143. No existing civil or criminal remedy for any wrongful action that is a violation of any statute or any rule of the department or the ordinance of any county shall be excluded or impaired by this section;

(8) The department shall establish procedures to identify the transfer or acquisition of an employing unit for the purposes of this section; and

(9) This section shall be interpreted and applied in a manner to meet the minimum requirements contained in any guidance or regulations issued by the United States Department of Labor."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act, upon its approval, shall take effect retroactive to June 9, 2005.

INTRODUCED BY:

_____________________________

BY REQUEST

HOUSE OF REPRESENTATIVES	H.B. NO.	1129
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII