Bill 546

                    Current Status

Bill Number:               546
Ratification Number:       237
Act Number:                154
Introducing Body:          Senate
Subject:                        Tax refunds, employment security
                           contributions and payments

(A154, R237, S546)

AN ACT TO AMEND SECTIONS 12-7-2240, 41-31-50, 41-31-60, 41-35-120, AND 41-41-40, ALL AS AMENDED, AND 41-31-350 AND 41-31-370, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO TAX REFUNDS TO TAXPAYERS BY THE SOUTH CAROLINA TAX COMMISSION AND TO EMPLOYMENT SECURITY CONTRIBUTIONS AND PAYMENTS, BENEFITS, AND CLAIMS, SO AS TO PROVIDE FOR A REPAYMENT BY THE TAX COMMISSION TO THE EMPLOYMENT SECURITY COMMISSION FOR OVERPAYMENT TO A RECIPIENT BY DEDUCTING FROM THE TAX REFUND DUE THE RECIPIENT-TAXPAYER, PROVIDE FOR DETERMINING THE EMPLOYER'S CONTRIBUTION RATE, PROVIDE A PENALTY FOR AN UNEMPLOYMENT COMPENSATION TAX EXECUTION, PROVIDE THAT AN EMPLOYER SUFFER A PENALTY OF TEN PERCENT OF THE CONTRIBUTIONS DUE BUT NOT LESS THAN TWENTY-FIVE DOLLARS NOR MORE THAN ONE THOUSAND DOLLARS FOR FAILURE TO FILE A REPORT OR TO PAY CONTRIBUTIONS, AND TO PROVIDE FOR COLLECTION OF DELINQUENT CONTRIBUTIONS.

Be it enacted by the General Assembly of the State of South Carolina:

Refund

SECTION 1. Section 12-7-2240 of the 1976 Code, as last amended by Act 346 of 1984, is further amended by adding:

"(C) Upon notification from the Employment Security Commission that the taxpayer is delinquent in repaying an overpayment of unemployment compensation benefits, the commission shall determine whether a refund is due to the debtor and shall transfer to the Employment Security Commission an amount equal to the refund owed not to exceed the amount of overpayment of unemployment compensation benefits plus the administrative expense of the commission. From this amount the Employment Security Commission will reimburse the commission for expenses incurred in administering this program.

At the time of the transfer of funds the commission shall send written notification to the taxpayer that the transfer has been made. In the case of a joint return the notice shall 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 the taxpayer, the fact that the 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 the taxpayer shall apply, in writing, for a hearing with the Employment Security Commission within thirty days of the date of the mailing of the notice.

In instances where subsections (B) and (C) of this section are applicable to the same individual, subsection (B) will have priority."

Contribution rate

SECTION 2. Items (4) and (5) of Section 41-31-50 of the 1976 Code, as last amended by Act 406 of 1984, are further amended to read:

"(4) In determining an employer's contribution rate, contributions for the quarter immediately preceding the computation date must be considered as paid before the computation date if they are paid by the employer on or before the end of the month following the quarter or within any period of grace allowed by the Commission for payment of the quarter's contribution.

(5) For calendar year 1986 and any subsequent calendar year, voluntary payments must not be permitted for the purpose of obtaining a lower rate of required contributions."

Rate

SECTION 3. Section 41-31-60 of the 1976 Code, as last amended by Act 62 of 1983, is further amended to read:

"Section 41-31-60. (1) If on the computation date upon which an employer's rate is to be computed as provided in Section 41-31-40 there is a delinquent report, a rate of two and seven-tenths percent must be assigned for the next calendar year. However, if the rate for the prior year or the computed rate for the computation period is greater than two and seven-tenths percent, the highest rate must be assigned until the next computation date. The assigned rate is applicable for the entire computation period even though the delinquent report is subsequently received.

(2) No employer is permitted to pay his unemployment compensation tax at a reduced rate for any quarter when a tax execution issued in accordance with Section 41-31-390 with respect to delinquent unemployment compensation tax for a previous quarter is unpaid and outstanding against the employer. If on the computation date upon which an employer's rate is computed as provided in Section 41-31-40 there is an outstanding tax execution, a rate of two and seven-tenths percent must be assigned for the computation period. If the rate for the prior year or the computed rate for the computation period is greater than two and seven-tenths percent, the highest rate must be assigned until the next computation date or until such time as any outstanding tax execution has been paid."

Penalty

SECTION 4. Section 41-31-350 of the 1976 Code is amended to read:

"Section 41-31-350. If any employer fails to file any report as required of him under Chapters 27 through 41 of this title with respect to wages or contributions within fifteen days from the date upon which the Commission has mailed to him a demand for the report, the Commission shall assess upon the employer a penalty of ten percent of the contributions due but no less than twenty-five nor more than one thousand dollars which is in addition to the contributions payable with respect to the report."

Rate of interest

SECTION 5. Section 41-31-370 of the 1976 Code is amended to read:

"Section 41-31-370. (1) Contributions unpaid on the date on which they are due and payable, as prescribed by the Commission, shall bear interest at the rate of one percent for each month or fraction thereof for which they remain unpaid but contributions as have accrued prior to the establishment of an employer's liability shall bear interest at the rate of one half of one percent a month or fraction thereof, to the date on which liability is established, unless it is found by the Commission that the delay in the establishment of liability resulted from wilful negligence of the employer, and shall bear interest at the rate of one percent a month or fraction thereof for which they remain unpaid thereafter.

(2) If any employer's amount of contributions which is due and payable, as prescribed by the Commission, is unpaid ten days following the date on which an assessment or debit memorandum has been issued therefor, a penalty of ten percent of the amount of contributions due and payable, not to exceed one thousand dollars, must be paid in addition to any other interest or penalty which may be applicable.

(3) The Commission may, for good cause, extend the time for the filing of reports and the payment of contributions. Any person to whom the extension is granted shall pay in addition to the contribution due, interest thereon at the rate of one percent per month or fraction thereof from the due date of the contribution to the date of payment."

Owner ineligible for benefits

SECTION 6. Section 41-35-120 of the 1976 Code, as last amended by Section 69, Part II, of Act 512 of 1984, is further amended to read:

"Section 41-35-120. Any insured worker is ineligible for benefits for:

(1) Leaving work voluntarily.--If the Commission finds that he has left voluntarily, without good cause, his most recent work prior to filing a request for determination of insured status or a request for initiation of a claim series within an established benefit year, with ineligibility beginning with the effective date of the request and continuing until he has secured employment and shows to the satisfaction of the Commission that he has performed services in employment as defined by Chapters 27 through 41 of this Title and earned wages for such services equal to at least eight times the weekly benefit amount of his claim.

(2) Discharge for cause connected with the employment.--If the Commission finds that he has been discharged for cause connected with his most recent work prior to filing a request for determination of insured status or a request for initiation of a claim series within an established benefit year, with ineligibility beginning with the effective date of the request, and continuing not less than five nor more than the next twenty-six weeks (in addition to the waiting period) with a corresponding and mandatory reduction of the insured worker's benefits to be calculated by multiplying his weekly benefit amount by the number of weeks of his disqualification. The ineligibility period must be determined by the Commission in each case according to the seriousness of the cause for discharge. A charge of discharge for cause connected with the employment may not be made for failure to meet production requirements unless the failure is occasioned by wilful failure or neglect of duty. 'Cause connected with the employment' as used herein shall require more than a failure in good performance of the employee as the result of inability or incapacity.

(3) Failure to accept work.--(a) If the Commission finds that he has failed, without good cause, (i) either to apply for available suitable work, when so directed by the employment office or the Commission, (ii) to accept available suitable work when offered to him by the employment office or an employer or (iii) to return to his customary self-employment (if any) when so directed by the Commission, the ineligibility begins with the week the failure occurred and continues until he has secured employment and shows to the satisfaction of the Commission that he has performed services in employment as defined in Chapters 27 through 41 of this title and earned wages for services equal to at least eight times his weekly benefit amount of his claim.

(b) In determining whether or not any work is suitable for an individual, the Commission shall consider, based on a standard of reasonableness as it relates to the particular individual concerned, the degree of risk involved to his health, safety, and morals, his physical fitness and prior training, his experience and prior earnings, his length of unemployment and prospects for securing local work in his customary occupation and the distance of the available work from his residence.

(c) Notwithstanding any other provisions of Chapters 27 through 41 of this title, no work is considered suitable and benefits may not be denied under such chapters to any otherwise eligible individual for refusing to accept new work under any of the following conditions: (i) If the position offered is vacant due directly to a strike, lockout, or other labor dispute, (ii) if the wages, hours, or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality, or (iii) if as a condition of being employed the individual would be required to join a company union or to resign from or refrain from joining any bona fide labor organization.

(d) Notwithstanding any other provisions of Chapters 27 through 41 of this title, no otherwise eligible individual may be denied benefits for any week for failure to apply for, or refusal to accept, suitable work because he is in training with the approval of the Commission.

(e) Notwithstanding any other provision of this chapter, no otherwise eligible individual may be denied benefits for any week because he is in training approved under Section 236(a)(1) of the Trade Act of 1974, nor may the individual be denied benefits by reason of leaving work to enter training, so long as the work left is not suitable employment, or because of the application to any week in training of provisions in this law (or any applicable federal unemployment compensation law), relating to availability for work, active search for work, or refusal to accept work.

For purposes of this subitem, 'suitable employment' means, with respect to an individual, work of a substantially equal or higher skill level than the individual's past adversely affected employment (as defined for purposes of the Trade Act of 1974), and wages for the work at not less than eighty percent of the individual's average weekly wage as determined for the purposes of the Trade Act of 1974.

(4) Labor dispute.--For any week in which the Commission finds that his total or partial unemployment is directly due to a labor dispute in active progress in the factory, establishment, or other premises at which he was last employed. This paragraph does not apply if it is shown to the satisfaction of the Commission that:

(a) He is not participating in, financing, or directly interested in the labor dispute;

(b) He does not belong to a grade or class of workers of which, immediately before he became unemployed by reason of the dispute, there were members employed at the premises at which the dispute exists, any of whom are participating in or directly interested in the dispute.

If in any case separate branches of work, which are commonly conducted as separate businesses in separate premises, are conducted in separate departments of the same premises, each department for the purpose of this item (4) is considered to be a separate factory, establishment, or other premises.

(5) Receiving benefits elsewhere.--For any week in which or a part of which he has received or is seeking unemployment benefits under an unemployment compensation law of another state or of the United States. If the appropriate agency of the other state or of the United States finally determines that he is not entitled to unemployment benefits, this disqualification does not apply.

(6) Voluntary retirement.--If the Commission finds that he voluntarily retired from his most recent work with the ineligibility beginning with the effective date of his claim and continuing for the duration of his unemployment and until the individual submits satisfactory evidence of having had new employment and of having earned wages of not less than eight times his weekly benefit amount as defined in Section 41-35-40. For the purpose of this section 'Most recent work' means the work from which the individual retired regardless of any work subsequent to his retirement in which he earned less than eight times his weekly benefit amount."

Collection of overpayments

SECTION 7. Section 41-41-40 of the 1976 Code, as last amended by Act 108 of 1981, is further amended by adding at the end:

"The Commission may, at its discretion, attempt collection of overpayments through the South Carolina Tax Commission in accordance with Section 12-7-2240. If the overpayment is collectible in accordance with Section 12-7-2240, the Commission shall add to the amount of the overpayment a collection fee of ten dollars for each collection attempt."

Time effective

SECTION 8. This act shall take effect upon approval by the Governor.