MISSISSIPPI LEGISLATURE

2005 Regular Session

To: Ways and Means

By: Representative Watson

House Bill 1684

AN ACT TO AMEND SECTIONS 27-7-901 AND 27-7-903, MISSISSIPPI CODE OF 1972, TO INCREASE THE TAX LEVIED ON AMOUNTS THAT ARE PAID TO PATRONS BY GAMING ESTABLISHMENTS; TO AMEND SECTION 75-76-177, MISSISSIPPI CODE OF 1972, TO INCREASE THE LICENSE FEE ON THE GROSS REVENUE OF GAMING LICENSEES; TO AMEND SECTION 71-5-353, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR A REDUCTION IN THE UNEMPLOYMENT COMPENSATION CONTRIBUTION RATE FOR CERTAIN EMPLOYERS; TO PROVIDE FOR THE REPEAL OF THE RATE REDUCTION UNDER CERTAIN CONDITIONS RELATING TO THE SIZE OF THE UNEMPLOYMENT COMPENSATION TRUST FUND; TO PROVIDE FOR A WORKFORCE TRAINING ENHANCEMENT CONTRIBUTION FOR CERTAIN EMPLOYERS SUBJECT TO THE UNEMPLOYMENT COMPENSATION LAW; TO ESTABLISH THE WORKFORCE TRAINING ENHANCEMENT FUND AND TO AUTHORIZE EXPENDITURES FROM THE FUND FOR EMPLOYEE TRAINING TO BE ADMINISTERED BY THE STATE BOARD FOR COMMUNITY AND JUNIOR COLLEGES AND THE GOVERNOR'S STATE WORKFORCE INVESTMENT BOARD; TO PROVIDE FOR THE REPEAL OF THE WORKFORCE CONTRIBUTION UNDER CERTAIN CONDITIONS RELATING TO THE SIZE OF THE UNEMPLOYMENT COMPENSATION TRUST FUND; TO AMEND SECTION 71-5-355, MISSISSIPPI CODE OF 1972, TO REVISE CERTAIN DEFINITIONS, REFERENCES AND TABLES IN THE MISSISSIPPI EMPLOYMENT SECURITY LAW WHICH ARE APPLICABLE TO EMPLOYER CONTRIBUTION COST RATE CRITERION AND SIZE OF FUND INDEX TO CONFORM TO THE CONTRIBUTION RATE REDUCTION; TO AMEND SECTION 71-5-453, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR A WORKFORCE TRAINING ENHANCEMENT FUND HOLDING ACCOUNT MAINTAINED BY THE MISSISSIPPI DEPARTMENT OF EMPLOYMENT SECURITY; TO AMEND SECTION 71-5-351, MISSISSIPPI CODE OF 1972, IN CONFORMITY; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 27-7-901, Mississippi Code of 1972, is amended as follows:

27-7-901. (1) There is hereby levied, assessed and shall be collected a tax of five percent (5%) upon amounts that are paid or credited by gaming establishments licensed under the provisions of the Mississippi Gaming Control Act to their patrons. The tax shall be collected by licensed gaming establishments and remitted to the State Tax Commission in the manner provided for by regulations promulgated by the Chairman of the State Tax Commission.

(2) As used in this section, "amounts that are paid or credited" means amounts or credits that are subject to the withholding or reporting requirements of the Internal Revenue Code.

(3) No credit shall be allowed under the Income Tax Law of 1952 for the tax collected by licensed gaming establishments pursuant to this section.

SECTION 2. Section 27-7-903, Mississippi Code of 1972, is amended as follows:

27-7-903. (1) There is hereby levied and assessed upon patrons of gaming establishments located in this state that are not licensed under the provisions of the Mississippi Gaming Control Act, a tax of five percent (5%) of the amounts that are paid or credited to such patrons by the gaming establishment, which tax is the same in kind and rate as has heretofore been imposed pursuant to Section 27-7-901 upon the patrons of gaming establishments which are licensed under the Mississippi Gaming Control Act. The legal incidence and duty to pay such taxes shall fall upon the patron. The assessment of such tax is subject to any exemptions as may exist under federal or state law. The State Tax Commission may enter into tax collection agreements regarding this tax.

(2) As used in this section, "amounts that are paid or credited" means amounts or credits that are subject to the withholding or reporting requirements of the Internal Revenue Code.

(3) No credit shall be allowed under the Income Tax Law of 1952 for the tax collected by gaming establishments pursuant to this section.

SECTION 3. Section 75-76-177, Mississippi Code of 1972, is amended as follows:

75-76-177. (1) From and after August 1, 1990, there is hereby imposed and levied on each gaming licensee a license fee based upon all the gross revenue of the licensee as follows:

(a) Four percent (4%) of all the gross revenue of the licensee which does not exceed Fifty Thousand Dollars ($50,000.00) per calendar month;

(b) Six percent (6%) of all the gross revenue of the licensee which exceeds Fifty Thousand Dollars ($50,000.00) per calendar month and does not exceed One Hundred Thirty-four Thousand Dollars ($134,000.00) per calendar month; and

(c) Eight percent (8%) of all the gross revenue of the licensee which exceeds One Hundred Thirty-four Thousand Dollars ($134,000.00) per calendar month.

(2) From and after July 1, 2005, there is imposed and levied on each gaming licensee an additional license fee of one percent (1%) of all the gross revenue of the licensee per calendar month. Such license fee shall be in addition to the license fee imposed and levied under subsection (1) of this section.

(3) All revenue received from any game or gaming device which is leased for operation on the premises of the licensee-owner to a person other than the owner thereof or which is located in an area or space on such premises which is leased by the licensee-owner to any such person, must be attributed to the owner for the purposes of this section and be counted as part of the gross revenue of the owner. The lessee is liable to the owner for his proportionate share of such license fees.

(4) If the amount of license fees required to be reported and paid pursuant to this section is later determined to be greater or less than the amount actually reported and paid by the licensee, the Chairman of the State Tax Commission shall:

(a) Assess and collect the additional license fees determined to be due, with interest thereon until paid; or

(b) Refund any overpayment, with interest thereon, to the licensee.

Interest must be computed, until paid, at the rate of one percent (1%) per month from the first day of the first month following either the due date of the additional license fees or the date of overpayment.

(5) Failure to pay the fees provided for in this section when they are due for continuation of a license shall be deemed a surrender of the license.

SECTION 4. Section 71-5-353, Mississippi Code of 1972, is amended as follows:

71-5-353. (1) Each employer shall pay contributions equal to five and four-tenths percent (5.4%) of taxable wages paid by him each calendar year, except as may be otherwise provided in Section 71-5-361 and except that each newly subject employer shall pay contributions at the rate of two and seven-tenths percent (2.7%) of taxable wages until his experience-rating record has been chargeable throughout not less than the twelve (12) consecutive calendar months ending on the computation date; thereafter his contribution rate shall be determined in accordance with the provisions of Section 71-5-355.

(2) Unless eligible for a modified rate as described in Section 71-5-355 of this chapter, each employer, as defined by Section 71-5-11(H) of this chapter, engaged in an employee leasing arrangement, with an employee leasing firm, on June 30, 1998, will be assigned a contributions rate of one and five-tenths percent (1.50%) for the calendar year 1999, and subsequent calendar years, until the employer is eligible for a modified rate, as described in Section 71-5-355 of this chapter, based on experience accumulated subsequent to December 31, 1998.

The department shall notify all employers, active in the department files and currently reporting, of the provisions of this paragraph, at their last known mailing address on or before August 15, 1998. All employee leasing firms shall report to the department the name, the federal identification number, mailing address, physical location address and telephone number of all their clients on or before October 15, 1998. Any employee leasing firm failing to comply with the provisions of this paragraph may be assessed an amount equal to one-half of one percent (1/2 of 1%) of total wages, or Five Hundred Dollars ($500.00), whichever is greater, for each client that the employee leasing firm fails to report. Collection of the above mentioned penalty shall be in conformity with department regulations.

(3) From and after January 1, 2005, contribution rates assigned to employers by the department, as determined pursuant to Sections 71-5-351, 71-5-353 and 71-5-355, shall be reduced by three tenths of one percent (.3%). Such reduction shall only apply to employers whose contribution rate, determined in accordance with Sections 71-5-353 and 71-5-355, is equal to or less than five and four tenths percent (5.4%), and shall include a three tenths of one percent (.3%) reduction to the rate as a result of violation of provisions of this chapter. The reduction in rates provided for herein shall not apply to state boards, instrumentalities and political subdivisions of the State of Mississippi referred to in Sections 71-5-357 and 71-5-359, or to nonprofit employers providing reimbursement to the department for the unemployment fund pursuant to Section 71-5-357(a). This reduction applies to all other employers. This subsection (3) shall be repealed and the size of fund and cost rate criterion shall be fixed for future years at the levels for the last rate computation:

(a) The average high cost multiple is equal to or less than 1.0. The average high cost multiple shall be computed as follows: The result of the unobligated balance of the Unemployment Compensation Fund at November 1 immediately preceding the new rate year divided by the total wages for the twelve (12) months ending on the June 30 immediately preceding the new rate year shall be the numerator and shall be divided by the simple average of the value of the three (3) highest cost rate criterion computations since 1974. The result rounded to the next lower one (1) decimal place will be the average high cost multiple; or

(b) The computed size of fund (average exposure criterion divided by cost rate criterion) defined in Section 71-5-355 reaches 1.0 and the cost rate criterion reaches the average for the highest value of the cost rate criterion computations during each of the economic cycles (economic cycles shall be those defined by the National Bureau of Economic Research) subsequent to the calendar year 1974. The reduction shall be accomplished as described in Section 71-5-355(1)(j) and (k); or

(c) The Unemployment Compensation Fund falls below Five Hundred Million Dollars ($500,000,000.00).

(4) (a) From and after January 1, 2005, the workforce enhancement contributions shall be applied at a rate of three tenths of one percent (.3%) upon the taxable wages as defined by Section 71-5-351, however, the workforce enhancement contribution shall not be applied to state boards, instrumentalities and political subdivisions of the State of Mississippi referred to in Sections 71-5-357 and 71-5-359, or to nonprofit employers providing reimbursement to the department for the unemployment fund pursuant to Section 71-5-357(a) or employers who are assigned a rate in accordance with Section 71-5-3.

(b) There is hereby created in the Treasury of the State of Mississippi a special fund to be known as the "Workforce Training Enhancement Fund," which consists of funds collected pursuant to subsection (1) of this section. Funds collected shall initially be deposited into the Clearing Account and subsequently transferred to the Workforce Training Enhancement Fund described in Section 71-5-453. In the event any employer pays an amount insufficient to cover the total contributions due, the amounts due shall be satisfied in the following order:

(i) Unemployment contributions; then

(ii) Workforce training enhancement contributions; then

(iii) Interest and damages.

(c) All monies deposited in the Workforce Training Enhancement Fund will be held by the Mississippi Department of Employment Security in such account for a period of not less than sixty (60) days. After such period, funds shall be transferred within thirty (30) days to the Workforce Training Enhancement Fund in a manner determined by the department. Interest earnings or interest credits on deposit amounts shall be retained in the account to pay the costs of the account. If after the period of twelve (12) months interest earnings less banking costs exceeds Ten Thousand Dollars ($10,000.00), such excess amounts shall be transferred to the Workforce Training Enhancement Fund within thirty (30) days. Such transfers shall occur once annually, during the month of January.

(d) All monies deposited into the Workforce Training Enhancement Fund shall be used exclusively for the following purposes: to provide training at no cost to employers in order to enhance employee productivity. The initial priority of these funds shall be for the benefit of existing businesses located within the state. Twenty percent (20%) of the funds allocate in the Workforce Training Enhancement Fund shall be utilized by the State Board for Community and Junior Colleges for nontraditional training, with an emphasis on short-term courses and flexible scheduling. Employers may request training for existing employees and/or newly hired employees from the State Board for Community and Junior Colleges. The State Board for Community and Junior Colleges will be responsible for providing the training. The Governor's State Workforce Investment Board will approve the annual plan and will review the results on a semiannual basis.

(e) All enforcement procedures for the collection of delinquent contributions contained in Sections 71-5-363 through 71-5-383 shall be applicable in all respects for collections of delinquent contributions designated for the Unemployment Compensation Fund and the Workforce Training Enhancement Fund.

(f) This subsection (4) shall be repealed and the size of fund and cost rate criterion shall be fixed at the levels computed for the last rate computation at the end of any calendar year in which the following has occurred:

(i) The average high cost multiple is equal to or less than 1.0. The average high cost multiple shall be computed as follows: The result of the unobligated balance of the unemployment compensation at November 1 immediately preceding the new rate year divided by the total wages for the twelve (12) months ending on the June 30 immediately preceding the new rate year shall be the numerator and shall be divided by the simple average of the value of the three (3) highest cost rate criterion computations since 1974. The result rounded to the next lower one (1) decimal place will be the average high cost multiple; or

(ii) The computed size of fund (average exposure criterion divided by cost rate criterion) defined in Section 71-5-355 reaches 1.0 and the cost rate criterion reaches the average for the highest value of the cost rate criterion computations during each of the economic cycles (economic cycles shall be those defined by the National Bureau of Economic Research) subsequent to the calendar year 1974. The reduction shall be accomplished as described in Section 71-3-355(1)(j) and (k); or

(iii) The Unemployment Compensation Fund falls below Five Hundred Million Dollars ($500,000,000.00).

SECTION 5. 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 department 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 department 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. For rate years 2005 and 2006, the CRC shall be adjusted downward by an amount necessary to satisfy one-half (1/2) the reductions required to maintain a general experience rate of nine tenths of one percent (.9%). For rate year 2007 and subsequent years, the CRC shall be adjusted downward by an amount necessary to satisfy one-half (1/2) the reductions required to maintain a general experience rate of seven tenths of one percent (.7%) until such time as the CRC equals the average for the highest value of the cost rate criterion computations during each of the economic cycles (economic cycles shall be those defined by the National Bureau of Economic Research) since the calendar year 1974, except as provided in subsection (3) of Section 71-5-353. When the remaining reduction is insufficient to cause the reductions as specified in this paragraph, additional reductions specified in subsection (2)(k) of this section may be made to the size of fund index to achieve the general experience rate specified in this paragraph, except as provided in Section 71-3-353. The CRC shall not be raised except as provided through annual computations and additions of future economic cycles.

(k) "Size of fund index" (SOFI) is defined as the ratio of the EC to the CRC. For the rate years 2005 and 2006, the SOFI shall be adjusted downward by an amount necessary to satisfy one-half (1/2) the reductions required to maintain a general experience rate of nine tenths of one percent (.9%). For rate year 2007 and subsequent years, the SOFI shall be adjusted downward by an amount necessary to satisfy one-half (1/2) the reductions required to maintain a minimum general experience rate of seven tenths of one percent (.7%) until such time as the SOFI is reduced from a target size of 1.5 to 1.0, except as provided in subsection (3) of Section 71-5-353. The SOFI shall not be raised in any event.

(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%). However, from and after January 1, 2005, and continuing until Section 71-5-353(3) shall be repealed, the reduction shall be accomplished as described in Section 71-5-355(l)(j) and (k), no employer's unemployment contribution rate shall be less than one tenth of one percent (.1%).

(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 department 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 department 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 department 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 department, 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 department 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.

The following table shall be applied to reduce contribution rates until Section 71-5-353(3) and (4) is repealed:

Benefit Ratio Individual Experience Rate:

0.0% - 0.3%

0.1 - 0.2

0.2 - 0.10

0.3 0.0

0.4 0.1

0.5 0.2

0.6 0.3

0.7 0.4

0.8 0.5

0.9 0.6

1.0 0.7

1.1 0.8

1.2 0.9

1.3 1.0

1.4 1.1

1.5 1.2

1.6 1.3

1.7 1.4

1.8 1.5

1.9 1.6

2.0 1.7

2.1 1.8

2.2 1.9

2.3 2.0

2.4 2.1

2.5 2.2

2.6 2.3

2.7 2.4

2.8 2.5

2.9 2.6

3.0 2.7

3.1 2.8

3.2 2.9

3.3 3.0

3.4 3.1

3.5 3.2

3.6 3.3

3.7 3.4

3.8 3.5

3.9 3.6

4.0 3.7

4.1 3.8

4.2 3.9

4.3 4.0

4.4 4.1

4.5 4.2

4.6 4.3

4.7 4.4

4.8 4.5

4.9 4.6

5.0 4.7

5.1 4.8

5.2 4.9

5.3 5.0

5.4 5.1

5.5 5.2

5.6 5.3

5.7 and above 5.4

 * * *

(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 department 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, as defined in subsection (1)(k) of this section, subtract the simple average of the current and preceding years' exposure criterions divided by the cost rate criterion, as defined in subsection (1)(j) of this section. The result is then multiplied by the product of the CRC, as defined in subsection (1)(j) of this section, 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 department 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 department;

3. Continued operation of the transferred portion by the successor after transfer; and

4. The execution and the filing with the department 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 department 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 department 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 department 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 department an application for review and redetermination of his contribution rate, setting forth his reasons therefor. If the department 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 department 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 department itself. Any such appeal shall be on the record before said designated hearing officer, and the decision of said department 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.

SECTION 6. Section 71-5-453, Mississippi Code of 1972, is amended as follows:

71-5-453. The State Treasurer shall be the ex officio treasurer and custodian of the fund, and shall administer such fund in accordance with the directions of the department, and shall issue his warrants upon it in accordance with such regulations as the department shall prescribe. He shall maintain within the fund three (3) separate accounts: (a) a clearing account, (b) an unemployment trust fund account, and (c) a benefit account. All monies payable to the fund, upon receipt thereof by the department, shall be forwarded to the Treasurer, who shall immediately deposit them in the clearing account. Refunds payable pursuant to Section 71-5-383 may be paid from the clearing account upon warrants issued by the Treasurer under the direction of the department. Transfers pursuant to Section 71-5-114 of all interest, penalties and damages collected shall be made to the Special Employment Security Administration Fund as soon as practicable after the end of each calendar quarter. Workforce training enhancement contributions shall be deposited into the workforce training enhancement holding fund account as described in this section. All other monies in the clearing account shall be immediately deposited with the Secretary of the Treasury of the United States of America to the credit of the account of this state in the Unemployment Trust Fund, established and maintained pursuant to Section 904 of the Social Security Act, as amended, any provisions of law in this state relating to the deposit, administration, release, or disbursement of monies in the possession or custody of this state to the contrary notwithstanding. The benefit account shall consist of all monies requisitioned from this state's account in the Unemployment Trust Fund. Except as herein otherwise provided, monies in the clearing and benefit accounts may be deposited by the Treasurer, under the direction of the department, in any bank or public depository in which general funds of the state may be deposited, but no public deposit insurance charge or premium shall be paid out of the fund. The State Treasurer shall be liable on his official bond for the faithful performance of his duties in connection with the Unemployment Compensation Fund under this chapter. A Workforce Training Enhancement Fund holding account shall be established by and maintained under the control of the Mississippi Department of Employment Security. The workforce training enhancement contributions collected pursuant to the provisions in this chapter shall be transferred from the clearing account into the Workforce Training Enhancement Fund holding account on the same schedule and under the same conditions as funds transferred to the Unemployment Compensation Fund. Such funds shall remain on deposit in the Workforce Training Enhancement Fund account for a period of sixty (60) days. After such period, contributions will be transferred to the Workforce Training Enhancement Fund by the Mississippi Department of Employment Security, within thirty (30) days. One such transfer shall be made monthly, but the department, in its discretion, may make additional transfers in any month. In the event such funds transferred are subsequently determined to be erroneously paid or collected, or if deposit of such funds is denied or rejected by the banking institution for any reason, or deposits are unable to clear drawer's account for any reason, the funds must be reimbursed by the recipient of such funds within thirty (30) days of mailing of notice by the Mississippi Department of Employment Security demanding such refund, unless funds are available in the Workforce Training Enhancement Fund holding account. In that event such amounts shall be immediately withdrawn from the workforce training enhancement holding fund account by the Mississippi Department of Employment Security and redeposited into the clearing account.

SECTION 7. Section 71-5-351, Mississippi Code of 1972, is amended as follows:

71-5-351. Contributions shall accrue and become payable by each employer for each calendar year in which he is subject to this chapter. Such contributions shall become due and be paid by each employer to the department for the fund each calendar quarter on or before the last day of the month next succeeding each calendar quarter in which the contributions accrue. The department mayextend the due date ofsuch contributions if the due date falls on a Saturday, Sunday or state or federal holiday. Such contributions shall not be deducted, in whole or in part, from the wages of individuals in such employer's employ.

For purposes of payment of contributions on remuneration paid to individuals, if two (2) or more related corporations concurrently employ the same individual and compensate such individual through a common paymaster which is one of such corporations, each such corporation shall be considered to have paid as remuneration to such individual only the amounts actually disbursed by it to such individual and shall not be considered to have paid as remuneration to such individual such amounts actually disbursed to such individual by another of such corporations.

In the payment of any contributions, a fractional part of a cent shall be disregarded unless it amounts to One-half Cent (1/2) or more, in which case it shall be increased to One Cent (1).

For the purposes of this section and Section 71-5-353, taxable wages shall not include that part of remuneration which, after remuneration equal to Seven Thousand Dollars ($7,000.00) has been paid in a calendar year to an individual by an employer or his predecessor with respect to employment during any calendar year, is paid to such individual by such employer during such calendar year unless that part of the remuneration is subject to a tax under a federal law imposing a tax against which credit may be taken for contributions required to be paid into a state employment fund. For the purposes of this section, the term "employment" shall include service constituting employment under any unemployment compensation law of another state.

Provided, however, that, absent evidence of willful or fraudulent attempt to avoid taxation, the effective date of liability of an employer or assessment of liability for covered employment against an employer shall not occur for any period preceding the three (3) calendar years before the date of registration or assessment, unless said three-year limitations period is waived by the employer.

SECTION 8. This act shall take effect and be in force from and after July 1, 2005, except for Sections 4, 5, 6 and 7, which shall take effect and be in force from and after January 1, 2005.