2005 Senate Bill text for SB0348

SENATE BILL 348

47th legislature - STATE OF NEW MEXICO - first session, 2005

INTRODUCED BY

Ben D. Altamirano

AN ACT

RELATING TO UNEMPLOYMENT COMPENSATION; INCREASING PENALTIES AND INTEREST FOR LATE FILING OF WAGE REPORTS AND LATE PAYMENT OF TAXES; RESTRICTING THE USE OF A CERTAIN FUND; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 51-1-12 NMSA 1978 (being Laws 1965, Chapter 192, Section 1, as amended) is amended to read:

"51-1-12. PENALTY--LATE PAYMENT OF CONTRIBUTIONS.--The rate of contribution of an employer shall in no case be raised as a penalty for, or as a result of, the late filing of any notice, report or payment of contributions required under Section 51-1-9 NMSA 1978 or any regulations promulgated thereunder. Effective as to all wages for employment paid on and after July 1, 1965, quarterly wage and contribution reports and contribution payments, if not filed on or before the due date as prescribed by the secretary, shall be subject to the following penalties:

A. if the required report for any calendar quarter is not filed within ten days after due date, a penalty of [fifty dollars ($50.00)] seventy-five dollars ($75.00) is to be paid by the employer;

B. if the contributions due on [such] the report are not paid in full within ten days after due date, an additional penalty of five percent but not less than twenty-five dollars ($25.00) is to be paid by the employer on any [such] contributions remaining unpaid;

C. if any payment required to be made by the Unemployment Compensation Law is attempted to be made by check [which] that is not paid upon presentment, a penalty of twenty-five dollars ($25.00) shall be paid by the employer; and

D. in no case shall any penalty as herein provided [or as imposed by this section prior to June 30, 1965] be assessed for any quarter prior to the six completed calendar quarters immediately preceding the quarter in which the employer shall be determined subject to the Unemployment Compensation Law, and in no case shall a penalty for late reporting or late payment of contribution be imposed if, in the opinion of the secretary, an employer's late reporting, late payment of contribution, or both, was occasioned by circumstances beyond the control of the employer, who in good faith exercised reasonable diligence in an effort to comply with the reporting and contribution payment provisions of the Unemployment Compensation Law."

Section 2. Section 51-1-34 NMSA 1978 (being Laws 1936 (S.S.), Chapter 1, Section 13, as amended) is amended to read:

"51-1-34. ADMINISTRATION FUNDS.--

A. There is created a special fund to be held in the custody of the state treasurer and known as the "unemployment compensation administration fund".

(1) All money paid into the fund is available to the secretary. All money in the fund shall be expended solely for the purposes and in the amount found necessary by the secretary of labor of the United States [of America] for the administration of the Unemployment Compensation Law. Except as provided in Subsection B of this section, the fund shall consist of money appropriated by the state, and all money received from the federal government or any of its agencies, including the department of labor of the United States [of America], the railroad retirement board or from any other source for such purpose. Money received from the railroad retirement board as compensation for services or facilities supplied to the board shall be paid into the fund. All money in the fund shall be deposited, administered and disbursed in accordance with the Unemployment Compensation Law and regulations, except that money in the fund shall not be commingled with other state funds but shall be maintained in a separate account on the books of the depository. Any balance in the fund shall not lapse at any time but shall be continuously available for expenditure consistent with the Unemployment Compensation Law. Such money is subject to the general laws applicable to the deposit of public money in New Mexico, and collateral pledged shall be maintained in a separate custody account.

(2) If Section 303(a)(5) of Title 3 of the Social Security Act and Section 3304(a)(4) of the Internal Revenue Code are amended to permit a state agency to use, in financing administrative expenditures incurred in carrying out its employment security functions, some part of the money collected, or to be collected, under the Unemployment Compensation Law, in partial or complete substitution for grants under Title 3, then the Unemployment Compensation Law shall be modified by proclamation and by general rules in the manner and to the extent and within the limits necessary to permit such use under the Unemployment Compensation Law, and the modification is effective on the same date as the use is permissible under federal amendments.

B. There is created a special fund to be held in the custody of the state treasurer and known as the "employment security department fund".

(1) The fund is separate from the unemployment compensation administration fund.

(2) All money paid into the employment security department fund may be expended only pursuant to an appropriation by the legislature or specific provision of law. The department shall submit its annual budget for expenditures from the fund in accordance with the rules and regulations established by the department of finance and administration governing the submission of budgets by state agencies. All balances in the fund at the end of the fiscal year [which] that have not been appropriated for expenditure shall remain in the fund and be invested by the state treasurer until appropriated by the legislature. The money in the fund, except for refunds of interest and penalties erroneously collected, and except for fiscal-year balances, shall be expended solely for the purposes and in the amount found necessary for the payment of the costs of administration of the unemployment insurance program not chargeable against federal grants or other funds received for the unemployment compensation administration fund and shall not be expended for any other purpose. Nothing in this section shall prevent the unencumbered money of the fund from being used as a revolving fund to cover necessary and proper expenditures for which federal funds have been duly requested but not yet received, subject to the charging of such expenditures against such funds when received. Money shall not be expended or made available for expenditure in any manner which would permit its substitution for, or cause a corresponding reduction in, federal funds which would be available, in the absence of such money, to finance expenditures for the administration of the Unemployment Compensation Law. The fund shall consist of all interest collected on delinquent contributions and all penalties provided by the Unemployment Compensation Law and all other money received for the fund from any other source. All money in the fund shall be deposited, administered and disbursed in accordance with this section, except that money in the fund shall not be commingled with other state funds but shall be maintained in a separate account on the books of the depository and is subject to the general laws applicable to the deposit of public money in New Mexico, and collateral pledged shall be maintained in a separate custody account.

C. The state treasurer is liable on his official bond for the faithful performance of his duties in connection with the funds created by Subsections A and B of this section, in addition to the liability upon all other bonds."

Section 3. Section 51-1-36 NMSA 1978 (being Laws 1936 (S.S.), Chapter 1, Section 14, as amended) is amended to read:

"51-1-36. COLLECTION OF CONTRIBUTIONS.--

A. Contributions unpaid on the date on which they are due and payable shall bear interest at the rate of one and one-half percent per month from and after such date until payment is received by the division. Interest collected pursuant to this subsection shall be paid into the employment security department fund.

B. If, after due notice, any employer defaults in any payment of contributions or interest thereon, the amount due shall be collected by civil action in the name of the division, and the employer adjudged in default shall pay the costs of such action. Civil actions brought under this section to collect contributions or interest thereon from an employer shall be heard by the court at the earliest possible date and shall be entitled to preference on the calendar of the court over all other civil actions except petitions for judicial review under this act and worker's compensation cases arising under Sections 52-1-1 through 52-2-13 NMSA 1978 or in the discretion of the secretary, if any contribution or any portion thereof or any interest or penalty imposed by the Unemployment Compensation Law is not paid within thirty days after the same becomes due, the secretary shall, after due notice and opportunity to be heard in accordance with regulations, issue a warrant under its official seal, directed to the sheriff of any county of the state commanding [him] the sheriff to levy upon and sell the real and personal property of the person owning the same, found within [his] that county, of the payment of the amount due and an added amount of ten percent of the contribution in addition to any other penalties imposed and costs of executing the warrant, and to return [such] the warrant to the secretary and pay to [him] the secretary the money collected by virtue thereof, by the time to be [therein] specified, not more than thirty days from the date of the warrant. In the event the division does not know the amount of contribution due, and the employer from whom the same is due refuses or fails to make reports showing what [he or it] the employer or the division claims for the amount of contributions [which it] that the division believes to be due, and the division files the warrant for the estimated amount, mailing notice to the employer stating that [it] the division is estimating the amount of contribution due and giving the estimated amount in the notice, the warrant and estimated amount shown [therein] shall have the same effect as any other warrant issued under this subsection. If the employer does not make a showing to the satisfaction of the secretary that the estimated amount is incorrect within thirty days after the warrant is filed with the county clerk, then the estimated amount shown in the warrant shall be and become the amount of the contribution due for the period stated in the warrant. The sheriff to whom any warrant, issued under this section, is directed shall, within five days after receipt of the same, file with the county clerk of [his] the sheriff's county a copy thereof, for which the clerk shall make no charge, and thereupon the county clerk shall record the same upon [his] the clerk's records and the day when such copy is filed. Thereupon the amount of the warrant so filed and entered shall become a lien upon all property, real and personal, of the person against whom it is issued, including choses in action, except negotiable instruments not past due; provided, however, that such lien shall be inferior to all other valid liens, encumbrances, mortgages, judgments and assessments [which] that are filed or placed of record prior to the filing of [such] the warrant. The sheriff or a representative of the division thereupon shall levy upon any property of the taxpayer, including negotiable instruments, and the property so levied on shall be sold in all respects with the like effect, and in the same manner as is prescribed by law with respect to executions against property upon judgments of a court of record, and the remedies of garnishment shall apply. Whenever any property or right to property upon which levy has been made is not sufficient to satisfy the claim for which levy is made, the sheriff or a representative of the division may thereafter, and as often as may be necessary, proceed to levy in like manner upon any other property or rights to property subject to levy of the person against whom the claim exists, until the amount due from [him] the person is fully paid. The sheriff shall be entitled to the general fees for [his] services in executing the warrant as now allowed by law for like services, to be collected in the same manner as now provided by law for like services. All costs of executing warrants including mileage of the sheriff serving and executing the same and all other costs in connection with the levy, including advertising or publication costs upon the sale of any property levied upon, shall be collected by the department from the employer from whom contribution is due.

C. In the event of any distribution of an employer's assets pursuant to an order of any court under the laws of this state, including any receivership, assignment for benefit of creditors, adjudicated insolvency, composition or similar proceeding, contributions then or thereafter due shall be paid in full prior to all other claims except taxes and claims for remuneration of not more than two hundred fifty dollars ($250) to each claimant, earned within six months of the commencement of the proceeding. In the event of an employer's adjudication in bankruptcy, judicially confirmed extension proposal, or composition, under the Federal Bankruptcy Code 11 U.S.C. Sec. 10l et seq., contributions then or thereafter due shall be entitled to such priority as is provided in the Federal Bankruptcy Code U.S.C. Title 11, Sec. 507.

D. If, not later than four years after the date on which any contributions or interest thereon are paid, an employing unit that has paid such contributions or interest [thereon shall make] makes application for an adjustment [thereof] in connection with subsequent contribution payments or for a refund [thereof] because [such] the adjustment cannot be made, and the secretary [shall determine] determines that [such] the contributions or interest or any portion [thereof] was erroneously collected, the secretary shall allow [such] the employing unit to make an adjustment, [thereof] without interest, in connection with subsequent contribution payments by [him] the employing unit, or if such adjustment cannot be made, the secretary shall refund the amount, without interest, from the fund to which the amount was deposited. For like cause and within the same period, adjustment or refund may be [so] made on the secretary's own initiative.

E. Any person, group of individuals, partnership or employing unit that acquires the organization, trade or business or substantially all the assets [thereof] from an employer shall notify the division in writing by registered mail not later than five days prior to the acquisition. Unless [such] notice is given, [such] the acquisition shall be void as against the division, if, at the time of the acquisition, any contributions are due and unpaid by the previous employer, and the secretary shall have the right to proceed against [such] that employer either in personam or in rem and the assets so acquired shall be subject to attachment for [such] the debt."

Section 4. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2005.

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