HB-4414, As Passed House, March 10, 2005
February 24, 2005, Introduced by Reps. Gosselin, Taub and Robertson and referred to the Committee on Employment Relations, Training, and Safety.
A bill to amend 1936 (Ex Sess) PA 1, entitled
"Michigan employment security act,"
by amending section 22 (MCL 421.22).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
22. (a) If an employer subject to this act transfers
subsequent
to June 30, 1954, any of the assets of his the
business by any means otherwise than in the ordinary course of
trade and there is not substantially common ownership, management,
or
control of the transferor and the transferee, such the
transfer shall be deemed a "transfer of business" for the purposes
of this section if the commission determines both of the following:
(1) That the transferee is an employer subject to this act on
the
transfer date, has become so subject
to this act as of the
transfer
date under section 41 (2)(a) 41(2)(a) or elects to
become subject to this act as of the transfer date under section
25. ;
and
(2) That the transferee has acquired and used the transferor's
trade name or good will, or that the transferee has continued or
within 12 months after the transfer resumed all or part of the
business of the transferor either in the same establishment or
elsewhere.
(b)
Notwithstanding the provisions of subsection
(a), a
transfer
of assets to a transferee which that
involves less than
75% of the transferor's assets shall not be deemed a transfer of
business unless all of the following occur:
(1) The commission is notified of the transfer of assets by
the transferor or transferee within 30 days after the end of the
quarter in which the transfer occurred.
(2)
The commission receives within 30 days after the its
request therefor,
a written approval by the transferor and
transferee
of a rating an experience account
transfer determined
in
accordance with the provisions of subsection (d) (c).
(3) In the case of a transferee who elects under section 25 to
become subject as of the transfer date, the commission receives the
election
within 30 days after the mailing of a notice of his the
right to elect.
(c)
Notwithstanding any other provisions of this section, if
an
employer subject to this act transfers subsequent to December
31,
1973, any of the assets of his business, by any means otherwise
than
in the ordinary course of trade, to any transferee or
transferees
substantially owned or controlled, in whole or major
part,
either directly or indirectly by legally enforceable means or
otherwise,
by the same interest or interests which owned or
controlled
the transferor at the time of such transfer, such
transfer
shall be deemed a "transfer of business" for the purposes
of
this section.
(c) (d)
(1) In the case of a transfer of business as defined
in subsections
subsection (a) , or
(b), and (c), the
commission
shall assign the transferor's rating experience
account,
or a pro rata part thereof of the account, to the
transferee.
The commission shall make such the
assignment as of
the
date on which the business was is
transferred or as of June
30 of the year in which the business was transferred, whichever
date
is earlier. The pro rata part of the transferor's rating
experience account to be assigned to the transferee shall be
determined on the basis of the percentage relationship to the
nearest
1/2 of 1% of that
the insured payroll for the 4 completed
calendar
quarters immediately prior to before the date of
transfer properly allocable to the transferred portion of the
business ,
bears to the insured payroll for the same period
allocable
to the entire business of the transferor immediately
prior
to before the date of the transfer.
(2)
When the commission transfers an employer's rating
experience account in whole or in part under this section, it shall
also transfer a proportionate share of the amount of the total
wages and wages subject to contributions under this act paid by the
transferor
and properly allocable to the transferred transfer of
business;
and such the
transferred account shall be liable
to be
charged
chargeable for all benefit payments based on employment in
the
business or portion thereof of the business transferred.
(3)
In determining whether the transferee
is a "qualified
employer"
qualifies for a contribution
rate that includes a
chargeable benefits component under section 19, the experience of
the
transferred account shall be deemed to be included as part of
the
experience of the transferee's rating experience
account. If
on
the date of the transfer the transferee
was a "qualified
employer"
qualified for a contribution
rate that includes a
chargeable
benefits component and the transferor was
did not a
"qualified
employer" qualify because of the provisions of section
19(a)(1),
the transferee shall not thereby lose
his the qualified
status. as
a "qualified employer".
(d) (e)
In the case of a transfer of business as defined in
subsections
subsection (a) , or
(b) , and (c) of
this section,
contribution rates are determined as follows:
(1) The rates of contributions applicable to the transferor
and
transferee for the calendar year subsequent to after the
calendar
year containing of the transfer date
shall be
respectively determined in accordance with section 19. In case of a
transfer
of part of an employer's rating experience
account under
subsection (d)
(c), the rate of contributions applicable to the
transferor and transferee shall not be changed for the portion of
the current calendar year remaining on the transfer date. In case
of
a transfer of an employer's entire
rating experience account
under
subsection (d) (c),
all of the following apply:
(i) (a)
the The transferor shall have no further interest in
the rating
experience account.
, his
(ii) The transferor's coverage shall be terminated as of the
effective
date of the transfer under section
24 (b), and if he
24(b).
(iii) If the transferor again becomes an employer as defined in
section
41 in the same calendar year in which
his coverage has
been
thus is terminated,
his the transferor's contribution rate
for the remainder of the calendar year shall be 2.7% as provided in
section
19. ; and (b) the
(iv) The rate of contributions applicable to the transferee
shall not be changed for the portion of the current calendar year
remaining on the transfer date.
(2)
A transferee or transferees, having that has no rate of
contributions
applicable immediately prior to before the transfer
date ,
shall, beginning with the first day of the quarter
in
which the transfer occurs, be assigned the same rate of
contributions which
was applicable that applied to the transferor
on the date of the transfer and a contribution rate of 2.7% for any
portion
of the calendar year prior to before the first day of the
quarter in which the transfer occurs.
(3) Where
If transfers of businesses simultaneously involve
2 or more transferors and a single transferee who has no rate of
contributions
applicable immediately prior to before the transfer
date, such
the transferee shall be assigned a contribution rate
beginning with the first day of the quarter in which the transfers
occur
based upon the rating experience
account percentage
determined
by the transferred rating experience
account balances
and the total and insured payrolls properly allocable to the
transferee as of the date on which the businesses were transferred,
or as of June 30 of the year in which the businesses were
transferred, whichever is earlier, and a contribution rate of 2.7%
for
any portion of the calendar year prior to before the first
day of the quarter in which the transfers occur. If none of the
transferors was an employer entitled to an adjusted contribution
rate, then a contribution rate of 2.7% shall apply to the
transferee for the calendar year in which the transfers occur.
Enacting section 1. This amendatory act takes effect July 1,
2005.
Enacting section 2. This amendatory act does not take effect
unless all of the following bills of the 93rd Legislature are
enacted into law:
[(a) Senate Bill No. 171.
(b) Senate Bill No. 174.
(c) House Bill No. 4415.
]