35A-4-309 - Nonprofit organizations -- Contributions -- Payments in lieu of contributions.
35A-4-309. Nonprofit organizations -- Contributions -- Payments in lieu ofcontributions.
(1) Notwithstanding any other provisions of this chapter for payments by employers,benefits paid to employees of nonprofit organizations, as described in Section 501(c)(3) of theInternal Revenue Code, 26 U.S.C. 501(c)(3), that are exempt from income tax under Section501(a), shall be financed in accordance with the following provisions:
(a) Any nonprofit organization which is, or becomes, subject to this chapter shall paycontributions under Section 35A-4-303, unless it elects in accordance with this Subsection (1) topay to the division for the unemployment fund an amount equal to the amount of regular benefitsand of 1/2 of the extended benefits paid that is attributable to service in the employ of thenonprofit organization, to individuals for weeks of unemployment that begin during the effectiveperiod of this election.
(b) (i) Any nonprofit organization that is, or becomes, subject to this chapter may elect tobecome liable for payments in lieu of contributions for a period of not less than one contributionyear beginning with the date on which the organization becomes subject to this chapter.
(ii) The nonprofit organization shall file a written notice of its election with the divisionnot later than 30 days immediately following the date that the division gives notice to theorganization that it is subject to this chapter.
(c) Any nonprofit organization that makes an election in accordance with Subsection(1)(b)(i) shall continue to be liable for payments in lieu of contributions until it files with thedivision a written notice terminating its election, not later than 30 days prior to the beginning ofthe contribution year for which this termination shall first be effective.
(d) (i) Any nonprofit organization that has been paying contributions under this chaptermay change to a reimbursable basis by filing with the division, no later than 30 days prior to thebeginning of any contribution year, a written notice of election to become liable for payments inlieu of contributions.
(ii) This election is not terminable by the organization for that year or the next year.
(e) The division may, for good cause, extend the period within which a notice of electionor a notice of termination must be filed and may permit an election to be retroactive.
(f) (i) The division, in accordance with department rules, shall notify each nonprofitorganization of any determination that the division may make of the organization's status as anemployer, of the effective date of any election that it makes, and of any termination of thiselection.
(ii) These determinations are subject to reconsideration, appeal, and review inaccordance with Section 35A-4-508.
(2) Payments in lieu of contributions shall be made in accordance with this Subsection(2).
(a) At the end of each calendar month, or at the end of any other period as determined bythe division, the division shall bill each nonprofit organization or group of nonprofitorganizations that has elected to make payments in lieu of contributions for an amount equal tothe full amount of regular benefits plus 1/2 of the amount of extended benefits paid during thismonth or other prescribed period that is attributable to service in the employ of the organization.
(b) Payment of any bill rendered under Subsection (2)(a) shall be made no later than 30days after the bill was mailed to the last-known address of the nonprofit organization or wasotherwise delivered to it, unless there has been an application for review and redetermination in
accordance with Subsection (2)(d).
(c) Payments made by any nonprofit organization under this Subsection (2) may not bededucted or deductible, in whole or in part, from the remuneration of individuals in the employof the organization.
(d) (i) The amount due specified in any bill from the division shall be conclusive on theorganization unless, not later than 15 days after the bill was mailed to its last-known address orotherwise delivered to it, the organization files an application for redetermination by the divisionor an appeal to the Division of Adjudication, setting forth the grounds for the application orappeal in accordance with Section 35A-4-508.
(ii) The division shall promptly review and reconsider the amount due specified in thebill and shall thereafter issue a redetermination in any case in which the application forredetermination has been filed.
(iii) Any redetermination is conclusive on the organization unless, no later than 15 daysafter the redetermination was mailed to its last known address or otherwise delivered to it, theorganization files an appeal to the Division of Adjudication in accordance with Section35A-4-508 and Chapter 1, Part 3, Adjudicative Proceedings, setting forth the grounds for theappeal.
(iv) Proceedings on appeal to the Division of Adjudication from the amount of a billrendered under this Subsection (2) or a redetermination of the amount shall be in accordance withSection 35A-4-508.
(e) Past due payments of amounts in lieu of contributions are subject to the same interestand penalties that, under Subsection 35A-4-305(1), attach to past due contributions.
(3) If any nonprofit organization is delinquent in making payments in lieu ofcontributions as required under Subsection (2), the division may terminate the organization'selection to make payment in lieu of contributions as of the beginning of the next contributionyear, and the termination is effective for that and the next contribution year.
(4) (a) In the discretion of the division, any nonprofit organization that elects to becomeliable for payments in lieu of contributions shall be required, within 30 days after the effectivedate of its election, to deposit money with the division.
(b) The amount of the deposit shall be determined in accordance with this Subsection (4).
(c) (i) The amount of the deposit required by this Subsection (4) shall be equal to 1% ofthe organization's total wages paid for employment as defined in Section 35A-4-204 for the fourcalendar quarters immediately preceding the effective date of the election, or the biennialanniversary of the effective date of election, whichever date shall be most recent and applicable.
(ii) If the nonprofit organization did not pay wages in each of these four calendarquarters, the amount of the deposit is as determined by the division.
(d) (i) Any deposit of money in accordance with this Subsection (4) shall be retained bythe division in an escrow account until liability under the election is terminated, at which time itshall be returned to the organization, less any deductions as provided in this Subsection (4).
(ii) The division may deduct from the money deposited under this Subsection (4) by anonprofit organization to the extent necessary to satisfy any due and unpaid payments in lieu ofcontributions and any applicable interest and penalties provided for in Subsection (2)(e).
(iii) The division shall require the organization within 30 days following any deductionfrom a money deposit under this Subsection (4) to deposit sufficient additional money to makewhole the organization's deposit at the prior level.
(iv) (A) The division may, at any time, review the adequacy of the deposit made by anyorganization.
(B) If, as a result of this review, the division determines that an adjustment is necessary,it shall require the organization to make an additional deposit within 30 days of written notice ofthe division's determination or shall return to it any portion of the deposit the division no longerconsiders necessary, as considered appropriate.
(e) If any nonprofit organization fails to make a deposit, or to increase or make whole theamount of a previously made deposit, as provided under this Subsection (4), the division mayterminate the organization's election to make payments in lieu of contributions.
(f) (i) Termination under Subsection (4)(e) shall continue for not less than thefour-consecutive-calendar-quarter period beginning with the quarter in which the terminationbecomes effective.
(ii) The division may extend for good cause the applicable filing, deposit, or adjustmentperiod by not more than 60 days.
(5) (a) Each employer liable for payments in lieu of contributions shall pay to thedivision for the fund the amount of regular benefits plus the amount of 1/2 of extended benefitspaid that are attributable to service in the employ of the employer.
(b) If benefits paid to an individual are based on wages paid by more than one employerand one or more of these employers are liable for payments in lieu of contributions, the amountpayable to the fund by each employer liable for the payments shall be determined in accordancewith Subsection (5)(c) or (d).
(c) If benefits paid to an individual are based on wages paid by one or more employerswho are liable for payments in lieu of contributions and on wages paid by one or more employerswho are liable for contributions, the amount of benefits payable by each employer that is liablefor payments in lieu of contributions shall be an amount that bears the same ratio to the totalbenefits paid to the individual as the total base-period wages paid to the individual by thatemployer bear to the total base-period wages paid to the individual by all of the individual'sbase-period employers.
(d) If benefits paid to an individual are based on wages paid by two or more employerswho are liable for payments in lieu of contributions, the amount of benefits payable by each ofthose employers shall be an amount which bears the same ratio to the total benefits paid to theindividual as the total base-period wages paid to the individual by the employer bear to the totalbase-period wages paid to the individual by all of the individual's base-period employers.
(6) (a) (i) Two or more employers who have become liable for payments in lieu ofcontributions, in accordance with this section and Subsection 35A-4-204(2)(d), may file a jointapplication to the division for the establishment of a group account for the purpose of sharing thecost of benefits paid that are attributable to service in the employ of these employers.
(ii) Each application shall identify and authorize a group representative to act as thegroup's agent for the purpose of this Subsection (6).
(b) (i) Upon approval of the application, the division shall establish a group account forthese employers effective as of the beginning of the calendar quarter in which it receives theapplication and shall notify the group's representative of the effective date of the account.
(ii) This account shall remain in effect for not less than two contribution years andthereafter until terminated at the discretion of the division or upon application by the group.
(c) Upon establishment of the account, each member of the group is liable for payments
in lieu of contributions with respect to each calendar quarter in the amount that bears the sameratio to the total benefits paid in the quarter attributable to service performed in the employ of allmembers of the group as the total wages paid for service in employment by the member in thequarter bear to the total wages paid during the quarter for service performed in the employ of allmembers of the group.
(d) The department shall prescribe rules, with respect to applications for establishment,maintenance, and termination of group accounts authorized by this Subsection (6), for addition ofnew members to, and withdrawal of active members from, these accounts, for the determinationof the amounts that are payable under this Subsection (6) by members of the group, and the timeand manner of these payments.
(7) (a) An employing unit that acquires a nonprofit organization or substantially all theassets of a nonprofit organization that has elected reimbursable coverage as defined in Subsection(1), in accordance with rules made by the commission, shall be given the subject date of thetransferring nonprofit organization, provided the transferring nonprofit organization ceases tooperate as an employing unit at the point of acquisition.
(b) The acquiring entity shall reimburse the Unemployment Compensation Fund for thetransferring nonprofit organization's share of any unreimbursed benefits paid to formeremployees of the transferring nonprofit organization.
Amended by Chapter 22, 2006 General Session