MISSISSIPPI LEGISLATURE
2005 Regular Session
To: Labor; Ways and Means
By: Representative Moss
AN ACT TO AMEND SECTION 71-5-355, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR THE UNEMPLOYMENT EXPERIENCE AND RATES ATTRIBUTABLE TO THE TRANSFER OF A TRADE OR BUSINESS WHERE COMMON OWNERSHIP OR MANAGEMENT IS RETAINED, PURSUANT TO FEDERAL LAW; TO PROVIDE CIVIL PENALTIES FOR CERTAIN VIOLATIONS RELATING TO THE ASSIGNMENT OF AN UNEMPLOYMENT CONTRIBUTION RATE; TO CODIFY SECTION 71-5-389, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR A SETOFF AGAINST TAX REFUNDS FOR DEBTS OWED TO THE MISSISSIPPI DEPARTMENT OF EMPLOYMENT SECURITY, TO PROVIDE FOR THE SUBMISSION OF SUCH DEBTS TO THE STATE TAX COMMISSION, TO PROVIDE FOR NOTICE TO THE DEBTOR, TO PROVIDE FOR THE TRANSFER OF SUCH FUNDS TO THE DEPARTMENT, TO AUTHORIZE HEARINGS AND PROVIDE FOR APPEALS, TO PROVIDE FOR CONFIDENTIALITY; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 71-5-355, Mississippi Code of 1972, is amended as follows:
71-5-355. (1) As used in this section, the following words and phrases shall have the following meanings, unless the context clearly requires otherwise:
(a) "Tax year" means any period beginning on January 1 and ending on December 31 of a year.
(b) "Computation date" means June 30 of any calendar year immediately preceding the tax year during which the particular contribution rates are effective.
(c) "Effective date" means January 1 of the tax year.
(d) Except as hereinafter provided, "payroll" means the total of all wages paid for employment by an employer as defined in Section 71-5-11, subsection H, plus the total of all remuneration paid by such employer excluded from the definition of wages by Section 71-5-351. For the computation of modified rates, "payroll" means the total of all wages paid for employment by an employer as defined in Section 71-5-11, subsection H.
(e) For the computation of modified rates, "eligible employer" means an employer whose experience-rating record has been chargeable with benefits throughout the thirty-six (36) consecutive calendar-month period ending on the computation date, except that any employer who has not been subject to the Mississippi Employment Security Law for a period of time sufficient to meet the thirty-six (36) consecutive calendar-month requirement shall be an eligible employer if his experience-rating record has been chargeable throughout not less than the twelve (12) consecutive calendar-month period ending on the computation date. No employer shall be considered eligible for a contribution rate less than five and four-tenths percent (5.4%) with respect to any tax year, who has failed to file any two (2) quarterly reports within the qualifying period by September 30 following the computation date. No employer or employing unit shall be eligible for a contribution rate of less than five and four-tenths percent (5.4%) for the tax year in which the employing unit is found by the commission to be in violation of Section 71-5-19(2) or (3) and for the next two (2) succeeding tax years. No representative of such employing unit who was a party to a violation as described in Section 71-5-19(2) or (3), if such representative was or is an employing unit in this state, shall be eligible for a contributions rate of less than five and four-tenths percent (5.4%) for the tax year in which such violation was detected by the commission and for the next two (2) succeeding tax years.
(f) With respect to any tax year, "reserve ratio" means the ratio which the total amount available for the payment of benefits in the Unemployment Compensation Fund, excluding any amount which has been credited to the account of this state under Section 903 of the Social Security Act, as amended, and which has been appropriated for the expenses of administration pursuant to Section 71-5-457 whether or not withdrawn from such account, on November 1 of each calendar year bears to the aggregate of the taxable payrolls of all employers for the twelve (12) calendar months ending on June 30 next preceding.
(g) "Modified rates" means the rates of employer contributions determined under the provisions of this chapter and the rates of newly subject employers, as provided in Section 71-5-353.
(h) For the computation of modified rates, "qualifying period" means a period of not less than the thirty-six (36) consecutive calendar months ending on the computation date throughout which an employer's experience-rating record has been chargeable with benefits; except that with respect to any eligible employer who has not been subject to this article for a period of time sufficient to meet the thirty-six (36) consecutive calendar-month requirement, "qualifying period" means the period ending on the computation date throughout which his experience-rating record has been chargeable with benefits, but in no event less than the twelve (12) consecutive calendar-month period ending on the computation date throughout which his experience-rating record has been so chargeable.
(i) The "exposure criterion" (EC) is defined as the cash balance of the Unemployment Compensation Fund which is available for the payment of benefits as of November 1 of each calendar year, divided by the total wages, exclusive of wages paid by all state agencies, all political subdivisions, reimbursable nonprofit corporations, and tax exempt public service employment, for the twelve-month period ending June 30 immediately preceding such date. The EC shall be computed to four (4) decimal places.
(j) The "cost rate criterion" (CRC) is defined as follows: Beginning with January 1974, the benefits paid for the twelve-month period ending December 1974 are summed and divided by the total wages for the twelve-month period ending on June 30, 1975. Similar ratios are computed by subtracting the earliest month's benefit payments and adding the benefits of the next month in the sequence and dividing each sum of twelve (12) months' benefits by the total wages for the twelve-month period ending on the June 30 which is nearest to the final month of the period used to compute the numerator. If December is the final month of the period used to compute the numerator, then the twelve-month period ending the following June 30 will be used for the denominator. The highest value of these ratios beginning with the ratio for benefits paid in calendar year 1974 is the cost rate criterion. The cost rate criterion shall be computed to four (4) decimal places. Benefits and total wages used in the computation of the cost rate criterion shall exclude all benefits and total wages applicable to state agencies, political subdivisions, reimbursable nonprofit corporations, and tax exempt PSE employment.
(k) "Size of fund index" (SOFI) is defined as the ratio of the EC to the CRC.
(l) No employer's contribution rate shall exceed five and four-tenths percent (5.4%), nor be less than four-tenths of one percent (.4%).
(2) Modified rates:
(a) For any tax year, when the reserve ratio on the preceding November 1, in the case of any tax year, equals or exceeds four percent (4%), the modified rates, as hereinafter prescribed, shall be in effect.
(b) Modified rates shall be determined for the tax year for each eligible employer on the basis of his experience-rating record in the following manner:
(i) The commission shall maintain an experience-rating record for each employer. Nothing in this chapter shall be construed to grant any employer or individuals performing services for him any prior claim or rights to the amounts paid by the employer into the fund.
(ii) Benefits paid to an eligible individual shall be charged against the experience-rating record of his base period employers in the proportion to which the wages paid by each base period employer bears to the total wages paid to the individual by all the base period employers, provided that benefits shall not be charged to an employer's experience-rating record if the commission finds that the individual:
1. Voluntarily left the employ of such employer without good cause attributable to the employer;
2. Was discharged by such employer for misconduct connected with his work;
3. Refused an offer of suitable work by such employer without good cause, and the commission further finds that such benefits are based on wages for employment for such employer prior to such voluntary leaving, discharge or refusal of suitable work, as the case may be; * * *
4. Had base period wages which included wages for previously uncovered services as defined in Section 71-5-511(e) to the extent that the Unemployment Compensation Fund is reimbursed for such benefits pursuant to Section 121 of Public Law 94-566;
5. Extended benefits paid under the provisions of Section 71-5-541 which are not reimbursable from federal funds shall be charged to the experience-rating record of base period employers;
6. Is still working for such employer on a regular part-time basis under the same employment conditions as hired. Provided, however, that benefits shall be charged against an employer if an eligible individual is paid benefits who is still working for such employer on a part-time "as-needed" basis;
7. Was hired to replace a United States serviceman or servicewoman called into active duty and was laid off upon the return to work by that serviceman or servicewoman, unless such employer is a state agency or other political subdivision or instrumentality of the state;
8. Was paid benefits during any week while in training with the approval of the commission, under the provisions of Section 71-5-513B, or for any week while in training approved under Section 236(a)(1) of the Trade Act of 1974, under the provisions of Section 71-5-513C; or
9. Is not required to serve the one-week waiting period as described in Section 71-5-505(2). In that event, only the benefits paid in lieu of the waiting period week may be noncharged.
(iii) The commission shall compute a benefit ratio for each eligible employer, which shall be the quotient obtained by dividing the total benefits charged to his experience-rating record during the period his experience-rating record has been chargeable, but not less than the twelve (12) consecutive calendar-month period nor more than the thirty-six (36) consecutive calendar-month period ending on the computation date, by his total taxable payroll for the same period on which all contributions due have been paid on or before the September 30 immediately following the computation date. Such benefit ratio shall be computed to the tenth of a percent (.1%), rounding any remainder to the next higher tenth.
If for the calendar year 1995, or any calendar year thereafter, the size of fund index (SOFI), as defined in this section, shall have computed for such calendar year at 1.75 or above, for purposes of adjustment of the general experience rate for such calendar year, then Table 6 or one of the tables subsequent to Table 6 shall be applied, according to their provisions:
TABLE 1
ILLUSTRATES A .10% REDUCTION OF THE INDIVIDUAL EXPERIENCE RATE
BASED ON A SOFI FACTOR OF 1.51 OR ABOVE BUT LESS THAN 1.55
A B
If Benefit Ratio is The Individual Experience Rate is
0.0% 0.10%
0.1 0.10
0.2 0.10
0.3 0.20
0.4 0.30
0.5 0.40
0.6 0.50
0.7 0.60
0.8 0.70
0.9 0.80
1.0 0.90
1.1 1.00
1.2 1.10
1.3 1.20
1.4 1.30
1.5 1.40
1.6 1.50
1.7 1.60
1.8 1.70
1.9 1.80
2.0 1.90
2.1 2.00
2.2 2.10
2.3 2.20
2.4 2.30
2.5 2.40
2.6 2.50
2.7 2.60
2.8 2.70
2.9 2.80
3.0 2.90
3.1 3.00
3.2 3.10
3.3 3.20
3.4 3.30
3.5 3.40
3.6 3.50
3.7 3.60
3.8 3.70
3.9 3.80
4.0 3.90
4.1 4.00
4.2 4.10
4.3 4.20
4.4 4.30
4.5 4.40
4.6 4.50
4.7 4.60
4.8 4.70
4.9 4.80
5.0 4.90
5.1 5.00
5.2 5.10
5.3 5.20
5.4 5.30
5.5 and above 5.40
TABLE 2
ILLUSTRATES A .20% REDUCTION OF THE INDIVIDUAL EXPERIENCE RATE
BASED ON A SOFI FACTOR OF 1.55 OR ABOVE BUT LESS THAN 1.60
A B
If Benefit Ratio is The Individual Experience Rate is
0.0% 0.10%
0.1 0.10
0.2 0.10
0.3 0.10
0.4 0.20
0.5 0.30
0.6 0.40
0.7 0.50
0.8 0.60
0.9 0.70
1.0 0.80
1.1 0.90
1.2 1.00
1.3 1.10
1.4 1.20
1.5 1.30
1.6 1.40
1.7 1.50
1.8 1.60
1.9 1.70
2.0 1.80
2.1 1.90
2.2 2.00
2.3 2.10
2.4 2.20
2.5 2.30
2.6 2.40
2.7 2.50
2.8 2.60
2.9 2.70
3.0 2.80
3.1 2.90
3.2 3.00
3.3 3.10
3.4 3.20
3.5 3.30
3.6 3.40
3.7 3.50
3.8 3.60
3.9 3.70
4.0 3.80
4.1 3.90
4.2 4.00
4.3 4.10
4.4 4.20
4.5 4.30
4.6 4.40
4.7 4.50
4.8 4.60
4.9 4.70
5.0 4.80
5.1 4.90
5.2 5.00
5.3 5.10
5.4 5.20
5.5 5.30
5.6 and above 5.40
TABLE 3
ILLUSTRATES A .30% REDUCTION OF THE INDIVIDUAL EXPERIENCE RATE
BASED ON A SOFI FACTOR OF 1.60 OR ABOVE BUT LESS THAN 1.65
A B
If Benefit Ratio is The Individual Experience Rate is
0.0% 0.10%
0.1 0.10
0.2 0.10
0.3 0.10
0.4 0.10
0.5 0.20
0.6 0.30
0.7 0.40
0.8 0.50
0.9 0.60
1.0 0.70
1.1 0.80
1.2 0.90
1.3 1.00
1.4 1.10
1.5 1.20
1.6 1.30
1.7 1.40
1.8 1.50
1.9 1.60
2.0 1.70
2.1 1.80
2.2 1.90
2.3 2.00
2.4 2.10
2.5 2.20
2.6 2.30
2.7 2.40
2.8 2.50
2.9 2.60
3.0 2.70
3.1 2.80
3.2 2.90
3.3 3.00
3.4 3.10
3.5 3.20
3.6 3.30
3.7 3.40
3.8 3.50
3.9 3.60
4.0 3.70
4.1 3.80
4.2 3.90
4.3 4.00
4.4 4.10
4.5 4.20
4.6 4.30
4.7 4.40
4.8 4.50
4.9 4.60
5.0 4.70
5.1 4.80
5.2 4.90
5.3 5.00
5.4 5.10
5.5 5.20
5.6 5.30
5.7 and above 5.40
TABLE 4
ILLUSTRATES A .40% REDUCTION OF THE INDIVIDUAL EXPERIENCE RATE
BASED ON A SOFI FACTOR OF 1.65 OR ABOVE BUT LESS THAN 1.70
A B
If Benefit Ratio is The Individual Experience Rate is
0.0% 0.10%
0.1 0.10
0.2 0.10
0.3 0.10
0.4 0.10
0.5 0.10
0.6 0.20
0.7 0.30
0.8 0.40
0.9 0.50
1.0 0.60
1.1 0.70
1.2 0.80
1.3 0.90
1.4 1.00
1.5 1.10
1.6 1.20
1.7 1.30
1.8 1.40
1.9 1.50
2.0 1.60
2.1 1.70
2.2 1.80
2.3 1.90
2.4 2.00
2.5 2.10
2.6 2.20
2.7 2.30
2.8 2.40
2.9 2.50
3.0 2.60
3.1 2.70
3.2 2.80
3.3 2.90
3.4 3.00
3.5 3.10
3.6 3.20
3.7 3.30
3.8 3.40
3.9 3.50
4.0 3.60
4.1 3.70
4.2 3.80
4.3 3.90
4.4 4.00
4.5 4.10
4.6 4.20
4.7 4.30
4.8 4.40
4.9 4.50
5.0 4.60
5.1 4.70
5.2 4.80
5.3 4.90
5.4 5.00
5.5 5.10
5.6 5.20
5.7 5.30
5.8 and above 5.40
TABLE 5
ILLUSTRATES A .50% REDUCTION OF THE INDIVIDUAL EXPERIENCE RATE
BASED ON A SOFI FACTOR OF 1.70 OR ABOVE BUT LESS THAN 1.75
A B
If Benefit Ratio is The Individual Experience Rate is
0.0% 0.10%
0.1 0.10
0.2 0.10
0.3 0.10
0.4 0.10
0.5 0.10
0.6 0.10
0.7 0.20
0.8 0.30
0.9 0.40
1.0 0.50
1.1 0.60
1.2 0.70
1.3 0.80
1.4 0.90
1.5 1.00
1.6 1.10
1.7 1.20
1.8 1.30
1.9 1.40
2.0 1.50
2.1 1.60
2.2 1.70
2.3 1.80
2.4 1.90
2.5 2.00
2.6 2.10
2.7 2.20
2.8 2.30
2.9 2.40
3.0 2.50
3.1 2.60
3.2 2.70
3.3 2.80
3.4 2.90
3.5 3.00
3.6 3.10
3.7 3.20
3.8 3.30
3.9 3.40
4.0 3.50
4.1 3.60
4.2 3.70
4.3 3.80
4.4 3.90
4.5 4.00
4.6 4.10
4.7 4.20
4.8 4.30
4.9 4.40
5.0 4.50
5.1 4.60
5.2 4.70
5.3 4.80
5.4 4.90
5.5 5.00
5.6 5.10
5.7 5.20
5.8 5.30
5.9 and above 5.40
TABLE 6
ILLUSTRATES A .60% REDUCTION OF THE INDIVIDUAL EXPERIENCE RATE
BASED ON A SOFI FACTOR OF 1.75 OR ABOVE BUT LESS THAN 1.80
A B
If Benefit Ratio is The Individual Experience Rate is
0.0% 0.10%
0.1 0.10
0.2 0.10
0.3 0.10
0.4 0.10
0.5 0.10
0.6 0.10
0.7 0.10
0.8 0.20
0.9 0.30
1.0 0.40
1.1 0.50
1.2 0.60
1.3 0.70
1.4 0.80
1.5 0.90
1.6 1.00
1.7 1.10
1.8 1.20
1.9 1.30
2.0 1.40
2.1 1.50
2.2 1.60
2.3 1.70
2.4 1.80
2.5 1.90
2.6 2.00
2.7 2.10
2.8 2.20
2.9 2.30
3.0 2.40
3.1 2.50
3.2 2.60
3.3 2.70
3.4 2.80
3.5 2.90
3.6 3.00
3.7 3.10
3.8 3.20
3.9 3.30
4.0 3.40
4.1 3.50
4.2 3.60
4.3 3.70
4.4 3.80
4.5 3.90
4.6 4.00
4.7 4.10
4.8 4.20
4.9 4.30
5.0 4.40
5.1 4.50
5.2 4.60
5.3 4.70
5.4 4.80
5.5 4.90
5.6 5.00
5.7 5.10
5.8 5.20
5.9 5.30
6.0 and above 5.40
TABLE 7
ILLUSTRATES A .70% REDUCTION OF THE INDIVIDUAL EXPERIENCE RATE
BASED ON A SOFI FACTOR OF 1.80 OR ABOVE BUT LESS THAN 1.85
A B
If Benefit Ratio is The Individual Experience Rate is
0.0% 0.10%
0.1 0.10
0.2 0.10
0.3 0.10
0.4 0.10
0.5 0.10
0.6 0.10
0.7 0.10
0.8 0.10
0.9 0.20
1.0 0.30
1.1 0.40
1.2 0.50
1.3 0.60
1.4 0.70
1.5 0.80
1.6 0.90
1.7 1.00
1.8 1.10
1.9 1.20
2.0 1.30
2.1 1.40
2.2 1.50
2.3 1.60
2.4 1.70
2.5 1.80
2.6 1.90
2.7 2.00
2.8 2.10
2.9 2.20
3.0 2.30
3.1 2.40
3.2 2.50
3.3 2.60
3.4 2.70
3.5 2.80
3.6 2.90
3.7 3.00
3.8 3.10
3.9 3.20
4.0 3.30
4.1 3.40
4.2 3.50
4.3 3.60
4.4 3.70
4.5 3.80
4.6 3.90
4.7 4.00
4.8 4.10
4.9 4.20
5.0 4.30
5.1 4.40
5.2 4.50
5.3 4.60
5.4 4.70
5.5 4.80
5.6 4.90
5.7 5.00
5.8 5.10
5.9 5.20
6.0 5.30
6.1 and above 5.40
TABLE 8
ILLUSTRATES A .80% REDUCTION OF THE INDIVIDUAL EXPERIENCE RATE
BASED ON A SOFI FACTOR OF 1.85 OR ABOVE BUT LESS THAN 1.90
A B
If Benefit Ratio is The Individual Experience Rate is
0.0% 0.10%
0.1 0.10
0.2 0.10
0.3 0.10
0.4 0.10
0.5 0.10
0.6 0.10
0.7 0.10
0.8 0.10
0.9 0.10
1.0 0.20
1.1 0.30
1.2 0.40
1.3 0.50
1.4 0.60
1.5 0.70
1.6 0.80
1.7 0.90
1.8 1.00
1.9 1.10
2.0 1.20
2.1 1.30
2.2 1.40
2.3 1.50
2.4 1.60
2.5 1.70
2.6 1.80
2.7 1.90
2.8 2.00
2.9 2.10
3.0 2.20
3.1 2.30
3.2 2.40
3.3 2.50
3.4 2.60
3.5 2.70
3.6 2.80
3.7 2.90
3.8 3.00
3.9 3.10
4.0 3.20
4.1 3.30
4.2 3.40
4.3 3.50
4.4 3.60
4.5 3.70
4.6 3.80
4.7 3.90
4.8 4.00
4.9 4.10
5.0 4.20
5.1 4.30
5.2 4.40
5.3 4.50
5.4 4.60
5.5 4.70
5.6 4.80
5.7 4.90
5.8 5.00
5.9 5.10
6.0 5.20
6.1 5.30
6.2 and above 5.40
TABLE 9
ILLUSTRATES A .90% REDUCTION OF THE INDIVIDUAL EXPERIENCE RATE
BASED ON A SOFI FACTOR OF 1.90 OR ABOVE BUT LESS THAN 1.95
A B
If Benefit Ratio is The Individual Experience Rate is
0.0% 0.10%
0.1 0.10
0.2 0.10
0.3 0.10
0.4 0.10
0.5 0.10
0.6 0.10
0.7 0.10
0.8 0.10
0.9 0.10
1.0 0.10
1.1 0.20
1.2 0.30
1.3 0.40
1.4 0.50
1.5 0.60
1.6 0.70
1.7 0.80
1.8 0.90
1.9 1.00
2.0 1.10
2.1 1.20
2.2 1.30
2.3 1.40
2.4 1.50
2.5 1.60
2.6 1.70
2.7 1.80
2.8 1.90
2.9 2.00
3.0 2.10
3.1 2.20
3.2 2.30
3.3 2.40
3.4 2.50
3.5 2.60
3.6 2.70
3.7 2.80
3.8 2.90
3.9 3.00
4.0 3.10
4.1 3.20
4.2 3.30
4.3 3.40
4.4 3.50
4.5 3.60
4.6 3.70
4.7 3.80
4.8 3.90
4.9 4.00
5.0 4.10
5.1 4.20
5.2 4.30
5.3 4.40
5.4 4.50
5.5 4.60
5.6 4.70
5.7 4.80
5.8 4.90
5.9 5.00
6.0 5.10
6.1 5.20
6.2 5.30
6.3 and above 5.40
TABLE 10
ILLUSTRATES A 1.00% REDUCTION OF THE INDIVIDUAL EXPERIENCE RATE
BASED ON A SOFI FACTOR OF 1.95 OR ABOVE
A B
If Benefit Ratio is The Individual Experience Rate is
0.0% 0.10%
0.1 0.10
0.2 0.10
0.3 0.10
0.4 0.10
0.5 0.10
0.6 0.10
0.7 0.10
0.8 0.10
0.9 0.10
1.0 0.10
1.1 0.10
1.2 0.20
1.3 0.30
1.4 0.40
1.5 0.50
1.6 0.60
1.7 0.70
1.8 0.80
1.9 0.90
2.0 1.00
2.1 1.10
2.2 1.20
2.3 1.30
2.4 1.40
2.5 1.50
2.6 1.60
2.7 1.70
2.8 1.80
2.9 1.90
3.0 2.00
3.1 2.10
3.2 2.20
3.3 2.30
3.4 2.40
3.5 2.50
3.6 2.60
3.7 2.70
3.8 2.80
3.9 2.90
4.0 3.00
4.1 3.10
4.2 3.20
4.3 3.30
4.4 3.40
4.5 3.50
4.6 3.60
4.7 3.70
4.8 3.80
4.9 3.90
5.0 4.00
5.1 4.10
5.2 4.20
5.3 4.30
5.4 4.40
5.5 4.50
5.6 4.60
5.7 4.70
5.8 4.80
5.9 4.90
6.0 5.00
6.1 5.10
6.2 5.20
6.3 5.30
6.4 and above 5.40
(iv) 1. The contribution rate for each eligible employer shall be the sum of two (2) rates: His individual experience rate in the range from zero percent (0%) to five and four-tenths percent (5.4%), plus a general experience rate. In no event shall the resulting rate be in excess of five and four-tenths percent (5.4%).
2. The employer's individual experience rate shall be equal to his benefit ratio as computed under subsection (2)(b)(iii) above.
3. The general experience rate shall be determined in the following manner: The commission shall determine annually, for the thirty-six (36) consecutive calendar-month period ending on the computation date, the amount of benefits which were not charged to the record of any employer and of benefits which were ineffectively charged to the employer's experience-rating record. For the purposes of subsection (2)(b)(iv)3, the term "ineffectively charged benefits" shall include:
The total of the amounts of benefits charged to the experience-rating records of all eligible employers which caused their benefit ratios to exceed five and four-tenths percent (5.4%), the total of the amounts of benefits charged to the experience-rating records of all ineligible employers which would cause their benefit ratios to exceed five and four-tenths percent (5.4%) if they were eligible employers, and the total of the amounts of benefits charged or chargeable to the experience-rating record of any employer who has discontinued his business or whose coverage has been terminated within such period; provided, that solely for the purposes of determining the amounts of ineffectively charged benefits as herein defined, a "benefit ratio" shall be computed for each ineligible employer, which shall be the quotient obtained by dividing the total benefits charged to his experience-rating record throughout the period ending on the computation date, during which his experience-rating record has been chargeable with benefits, by his total taxable payroll for the same period on which all contributions due have been paid on or before the September 30 immediately following the computation date; and provided further, that such benefit ratio shall be computed to the tenth of one percent (.1%) and any remainder shall be rounded to the next higher tenth. The ratio of the sum of these amounts to the taxable wages paid during the same period by all eligible employers whose benefit ratio did not exceed five and four-tenths percent (5.4%), computed to the next higher tenth of one percent (.1%), shall be the general experience rate.
4. The general experience rate shall be adjusted by use of the size of fund index factor. This factor may be positive or negative, and shall be determined as follows: From the target SOFI of 1.50, subtract the simple average of the current and preceding years' exposure criterions divided by the cost rate criterion. The result is then multiplied by the product of the CRC and total wages for the twelve-month period ending June 30 divided by the taxable wages for the twelve-month period ending June 30. This is the percentage positive or negative added to the general experience rate. This percentage is computed to one (1) decimal place, and rounded to the next higher tenth.
5. Notwithstanding any other provisions of subsection (2)(b)(iv), if the general experience rate for any tax year as computed and adjusted on the basis of the size of fund index is a negative percentage, it shall be disregarded.
6. The commission shall include in its annual rate notice to employers a brief explanation of the elements of the general experience rate, and shall include in its regular publications an annual analysis of benefits not charged to the record of any employer, and of the benefit experience of employers by industry group whose benefit ratio exceeds four percent (4%), and of any other factors which may affect the size of the general experience rate.
(v) When any employing unit in any manner succeeds to or acquires the organization, trade, business or substantially all the assets thereof of an employer, excepting any assets retained by such employer incident to the liquidation of his obligations, whether or not such acquiring employing unit was an employer within the meaning of Section 71-5-11, subsection H, prior to such acquisition, and continues such organization, trade or business, the experience-rating and payroll records of the predecessor employer shall be transferred as of the date of acquisition to the successor employer for the purpose of rate determination.
(vi) When any employing unit succeeds to or acquires a distinct and severable portion of an organization, trade or business, the experience-rating and payroll records of such portion, if separately identifiable, shall be transferred to the successor upon:
1. The mutual consent of the predecessor and the successor;
2. Approval of the commission;
3. Continued operation of the transferred portion by the successor after transfer; and
4. The execution and the filing with the commission by the predecessor employer of a waiver relinquishing all rights to have the experience-rating and payroll records of the transferred portion used for the purpose of determining modified rates of contribution for such predecessor.
(vii) If the successor was an employer subject to this chapter prior to the date of acquisition, it shall continue to pay contributions at the rate applicable to it from the date the acquisition occurred until the end of the then current tax year. If the successor was not an employer prior to the date of acquisition, it shall pay contributions at the rate applicable to the predecessor or, if more than one (1) predecessor and the same rate is applicable to both, the rate applicable to the predecessor or predecessors, from the date the acquisition occurred until the end of the then current tax year. If the successor was not an employer prior to the date the acquisition occurred and simultaneously acquires the businesses of two (2) or more employers to whom different rates of contributions are applicable, it shall pay contributions from the date of the acquisition until the end of the current tax year at a rate computed on the basis of the combined experience-rating and payroll records of the predecessors as of the computation date for such tax year. In all cases the rate of contributions applicable to such successor for each succeeding tax year shall be computed on the basis of the combined experience-rating and payroll records of the successor and the predecessor or predecessors.
(viii) The commission shall notify each employer quarterly of the benefits paid and charged to his experience-rating record; and such notification, in the absence of an application for redetermination filed within thirty (30) days after the date of the mailing of such notice, shall be final, conclusive and binding upon the employer for all purposes. A redetermination, made after notice and opportunity for a fair hearing, by a hearing officer designated by the commission who shall consider and decide these and related applications and protests; and the finding of fact in connection therewith may be introduced into any subsequent administrative or judicial proceedings involving the determination of the rate of contributions of any employer for any tax year, and shall be entitled to the same finality as is provided in this subsection with respect to the findings of fact in proceedings to redetermine the contribution rate of an employer.
(ix) The commission shall notify each employer of his rate of contribution as determined for any tax year as soon as reasonably possible after November 1 of the preceding year. Such determination shall be final, conclusive and binding upon such employer unless, within thirty (30) days after the date of the mailing of such notice to his last known address, the employer files with the commission an application for review and redetermination of his contribution rate, setting forth his reasons therefor. If the commission grants such review, the employer shall be promptly notified thereof and shall be afforded an opportunity for a fair hearing by a hearing officer designated by the commission who shall consider and decide these and related applications and protests; but no employer shall be allowed, in any proceeding involving his rate of contributions or contribution liability, to contest the chargeability to his account of any benefits paid in accordance with a determination, redetermination or decision pursuant to Sections 71-5-515 through 71-5-533 except upon the ground that the services on the basis of which such benefits were found to be chargeable did not constitute services performed in employment for him, and then only in the event that he was not a party to such determination, redetermination, decision or to any other proceedings provided in this chapter in which the character of such services was determined. The employer shall be promptly notified of the denial of this application or of the redetermination, both of which shall become final unless, within ten (10) days after the date of mailing of notice thereof, there shall be an appeal to the commission itself. Any such appeal shall be on the record before said designated hearing officer, and the decision of said commission shall become final unless, within thirty (30) days after the date of mailing of notice thereof to the employer's last known address, there shall be an appeal to the Circuit Court of the First Judicial District of Hinds County, Mississippi, in accordance with the provisions of law with respect to review of civil causes by certiorari.
(x) Notwithstanding any other provision of law, the following shall apply regarding assignment of rates and transfers of experience:
(a) (1) If an employer transfers its trade or business, or a portion thereof, to another employer and, at the time of the transfer, there is substantially common ownership, management or control of the two (2) employers, then the unemployment experience attributable to the transferred trade or business shall be transferred to the employer to whom such business is so transferred. The rates of both employers shall be recalculated and made effective on January 1 of the year following the year the transfer occurred.
(2) If, following a transfer of experience under paragraph (1), the department determines that a substantial purpose of the transfer of trade or business was to obtain a reduced liability of contributions, then the experience rating accounts of the employers involved shall be combined into a single account and a single rate assigned to such account.
(b) Whenever a person who is not an employer or an employing unit under this chapter at the time it acquires the trade or business of an employer, the unemployment experience of the acquired business shall not be transferred to such person if the department finds that such person acquired the business solely or primarily for the purpose of obtaining a lower rate of contributions. Instead, such person shall be assigned the new employer rate under Section 71-5-353. In determining whether the business was acquired solely or primarily for the purpose of obtaining a lower rate of contributions, the department shall use objective factors which may include the cost of acquiring the business, whether the person continued the business enterprise of the acquired business, how long such business enterprise was continued, or whether a substantial number of new employees were hired for performance of duties unrelated to the business activity conducted prior to acquisition.
(c) (1) If a person knowingly violates or attempts to violate subsection (a) or (b) or any other provision of this chapter related to determining the assignment of a contribution rate, or if a person knowingly advises another person in a way that results in a violation of such provision, the person shall be subject to the following penalties:
(A) If the person is an employer, then such employer shall be assigned the highest rate assignable under this chapter for the rate year during which such violation or attempted violation occurred and the three (3) rate years immediately following this rate year. However, if the person's business is already at such highest rate for any year, or if the amount of increase in the person's rate would be less than two percent (2%) for such year, then a penalty rate of contributions of two percent (2%) of taxable wages shall be imposed for such year. The penalty rate will apply to the successor business as well as the related entity from which the employees were transferred in an effort to obtain a lower rate of contributions.
(B) If the person is not an employer, such person shall be subject to a civil money penalty of not more than Five Thousand Dollars ($5,000.00). Each such transaction for which advice was given and each occurrence or reoccurrence after notification being given by the department shall be a separate offense and punishable by a separate penalty. Any such fine shall be deposited in the penalty and interest account established under Section 71-5-114.
(2) For purposes of this section, the term "knowingly" means having actual knowledge of or acting with deliberate ignorance or reckless disregard for the prohibition involved.
(3) For purposes of this section, the term "violates or attempts to violate" includes, but is not limited to, intent to evade, misrepresentation or willful nondisclosure.
(4) In addition to the penalty imposed by paragraph (1), any violation of this section may be punishable by a fine of not more than Ten Thousand Dollars ($10,000.00) or by imprisonment for not more than five (5) years, or by both such fine and imprisonment. This section shall prohibit prosecution under any other criminal statute of this state.
(d) The department shall establish procedures to identify the transfer or acquisition of a business for purposes of this section.
(e) For purposes of this section, (1) "person" has the meaning given such term by Section 7701(a)(1) of the Internal Revenue Code of 1986, and (2) "employing unit" has the meaning as set forth in Section 71-5-11.
(f) This section shall be interpreted and applied in such a manner as to meet the minimum requirements contained in any guidance or regulations issued by the United States Department of Labor.
SECTION 2. The following provision shall be codified as Section 71-5-389, Mississippi Code of 1972:
71-5-389. (1) For the purposes of this section, the following terms shall have the respective meanings ascribed by this section:
(a) "Claimant agency" means the Mississippi Department of Employment Security.
(b) "Debtor" means any individual owing money or having a delinquent account with any claimant agency, which obligation has not been adjudicated satisfied by court order, set aside by court order, or discharged in bankruptcy.
(c) "Debt" means any sum due and owing any claimant agency, including costs, court costs, fines, penalties and interest which have accrued through contract, subrogation, tort, operation of law, or any other legal theory regardless of whether there is an outstanding judgment for that sum which is legally collectible and for which a collection effort has been or is being made.
(d) "Commission" means the State Tax Commission of the State of Mississippi.
(e) "Refund" means the Mississippi income tax refund which the commission determines to be due any individual taxpayer.
(2) The collection remedy authorized by this section is in addition to and is not substitution for any other remedy available by law.
(3) (a) A claimant agency may submit debts in excess of Twenty-five Dollars ($25.00) owed to it to the commission for collection through setoff, under the procedure established by this section, except in cases where the validity of the debt is legitimately in dispute, an alternate means of collection is pending and believed to be adequate, or such collection would result in a loss of federal funds or federal assistance.
(b) Upon the request of a claimant agency, the commission shall set off any refund, as defined herein, against the sum certified by the claimant agency as provided in this section.
(4) (a) Within the time frame specified by the commission, a claimant agency seeking to collect a debt through setoff shall supply the information necessary to identify each debtor whose refund is sought to be set off and certify the amount of debt or debts owed by each such debtor.
(b) If a debtor identified by a claimant agency is determined by the commission to be entitled to a refund of at least Twenty-five Dollars ($25.00), the commission shall transfer an amount equal to the refund owed, not to exceed the amount of the claimed debt certified, to the claimant agency. The State Tax Commission shall send the excess amount to the debtor within a reasonable time after such excess is determined. At the time of the transfer of funds to a claimant agency pursuant to subsection (4)(b) above, the commission shall notify the taxpayer or taxpayers whose refund is sought to be set off that the transfer has been made. Such notice shall clearly set forth the name of the debtor, the manner in which the debt arose, the amount of the claimed debt, the transfer of funds to the claimant agency pursuant to subsection (4)(b) above and the intention to set off the refund against the debt, the amount of the refund in excess of the claimed debt, the taxpayer's opportunity to give written notice to contest the setoff within thirty (30) days of the date of mailing of the notice, the name and mailing address of the claimant agency to which the application for such a hearing must be sent, and the fact that the failure to apply for such a hearing, in writing, within the thirty-day period will be deemed a waiver of the opportunity to contest the setoff. In the case of a joint return or a joint refund, the notice shall also state the name of the taxpayer named in the return, if any, against whom no debt is claimed, the fact that a debt is not claimed against such taxpayer, the fact that such taxpayer is entitled to receive a refund if it is due him regardless of the debt asserted against his spouse, and that in order to obtain a refund due him. Such taxpayer must apply in writing for a hearing with the claimant agency named in the notice within thirty (30) days of the date of the mailing of the notice. If a taxpayer fails to apply in writing for such a hearing within thirty (30) days of the mailing of such notice, he will have waived his opportunity to contest the setoff.
(c) Upon receipt of funds transferred from the commission pursuant to subsection (4)(b) above, the claimant agency shall deposit and hold such funds in an escrow account until a final determination of the validity of the debt.
(d) The claimant agency shall pay the commission a fee, not to exceed Seventeen Dollars ($17.00) in each case in which a tax refund is identified as being available for offset. Such fees shall be deposited by the commission into a special fund hereby created in the State Treasury, out of which the Legislature shall appropriate monies to defray expenses of the commission in employing personnel to administer the provisions of this section.
(5) (a) When the claimant agency receives a protest or an application in writing from a taxpayer within thirty (30) days of the notice issued by the commission, the claimant agency shall set a date to hear the protest and give notice to the taxpayer by registered or certified mail of the date so set. The time and place of such hearing shall be designated in such notice and the date set shall not be less than fifteen (15) days from the date of such notice. If, at the hearing, the sum asserted as due and owing is found not to be correct, an adjustment to the claim may be made. The claimant agency shall give notice to the debtor of its final determination as provided in subsection (c) of this section.
(b) No issues shall be reconsidered at the hearing which have been previously litigated.
(c) If any debtor is dissatisfied with the final determination made at the hearing by the claimant agency, he may appeal the final determination to the circuit court of the county in which the main office of the claimant agency is located by filing notice of appeal with the administrative head of the claimant agency and with the clerk of the circuit court of the county in which the appeal shall be taken within thirty (30) days from the date the notice of final determination was given by the claimant agency.
(6) (a) Upon final determination of the amount of the debt due and owing by means of hearing or by the taxpayer's default through failure to comply with timely request for review, the claimant agency shall remove the amount of the debt due and owing from the escrow account and credit such amount to the debtor's obligation.
(b) Upon transfer of the debt due and owing from the escrow account to the credit of the debtor's account, the claimant agency shall notify the debtor in writing of the finalization of the setoff. Such notice shall include a final accounting if the refund which was setoff, including the amount of the refund to which the debtor was entitled prior to the setoff, the amount of the debt due and owing, the amount of the commission's collection fee, the amount of the refund in excess of the debt which was returned to the debtor by the commission, and the amount of the funds transferred to the claimant agency in excess of the debt determined to be due and owing at a hearing, if such a hearing was held. At such time, the claimant agency shall refund to the debtor the amount of the claimed debt originally certified and transferred to it by the commission in excess of the amount of debt finally found to be due and owing.
(7) (a) Notwithstanding the provision that prohibits disclosure by the commission of the contents of taxpayer records or information and notwithstanding any other confidentiality statute, the State Tax Commission may provide to a claimant agency all information necessary to accomplish and effectuate the intent of the section.
(b) The information obtained by claimant agency from the commission in accordance with the provisions of this section shall retain its confidentiality and shall only be used by a claimant agency in the pursuit of its debt collection duties and practices; and any employee or prior employee of any claimant agency who unlawfully discloses any such information for any other purpose, except as specifically authorized by law, shall be subject to the same penalties specified by law for unauthorized confidential information by an agent or employee of the State Tax Commission.
SECTION 3. This act shall take effect and be in force from and after July 1, 2005.