July 16, 2009, Introduced by Reps. Haveman, Rogers, Genetski, Hansen, Kowall, Proos, Wayne Schmidt, Daley, McMillin, Booher, DeShazor, Kurtz, Bolger, Lori, Tyler, Denby and Moss and referred to the Committee on Labor.
A bill to amend 1936 (Ex Sess) PA 1, entitled
"Michigan employment security act,"
by amending sections 10, 15, 54, and 62 (MCL 421.10, 421.15,
421.54, and 421.62), section 10 as amended by 2003 PA 84, section
15 as amended by 1996 PA 498, section 54 as amended by 2002 PA 192,
and section 62 as amended by 1995 PA 125.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 10. (1) There is created in the department of treasury a
special fund to be known and designated as the administration fund
(Michigan employment security act). Any balances in the
administration fund at the end of any fiscal year of this state
shall be carried over as a part of the administration fund and
shall not revert to the general fund of this state. Except as
otherwise provided in subsection (3), all money deposited into the
administration fund under this act shall be appropriated by the
legislature to the unemployment agency to pay the expenses of the
administration of this act.
(2) The administration fund shall be credited with all money
appropriated to the fund by the legislature, all money received
from the United States or any agency of the United States for that
purpose, and all money received by this state for the fund. All
money in the administration fund that is received from the federal
government or any agency of the federal government or that is
appropriated by this state for the purposes of this act, except
money requisitioned from the account of this state in the
unemployment trust fund pursuant to a specific appropriation made
by the legislature in accordance with section 903(c)(2) of title IX
of
the social security act, 42 U.S.C. 1103 USC 1103(c)(2), and with
section 17(3)(f), shall be expended solely for the purposes and in
the amounts found necessary by the appropriate agency of the United
States and the legislature for the proper and efficient
administration of this act.
(3) All money requisitioned from the account of this state in
the unemployment trust fund pursuant to a specific appropriation
made by the legislature in accordance with section 903(c)(2) of
title
IX of the social security act, 42 U.S.C. 1103 USC 1103(c)(2),
and with section 17(3)(f), shall be deposited in the administration
fund. Any money that remains unexpended at the close of the 2-year
period beginning on the date of enactment of a specific
appropriation shall be immediately redeposited with the secretary
of the treasury of the United States to the credit of this state's
account in the unemployment trust fund; or any money that for any
reason cannot be expended or is not to be expended for the purpose
for which appropriated before the close of this 2-year period shall
be redeposited at the earliest practicable date.
(4) If any money received after June 30, 1941, from the
appropriate agency of the United States under title III of the
social
security act, chapter 531, 49 Stat. 620, 42 U.S.C. USC 501
to 504, or any unencumbered balances in the administration fund
(Michigan employment security act) as of that date, or any money
granted after that date to this state under the Wagner-Peyser act,
chapter 49, 48 Stat. 113, or any money made available by this state
or its political subdivisions and matched by money granted to this
state under the Wagner-Peyser act, chapter 49, 48 Stat. 113, is
found by the appropriate agency of the United States, because of
any action or contingency, to have been lost or been expended for
purposes other than, or in amounts in excess of, those found
necessary by that agency of the United States for the proper
administration of this act, the money shall be replaced by money
appropriated for that purpose from the general funds of this state
to the administration fund (Michigan employment security act) for
expenditure as provided in this act. Upon receipt of notice of such
a finding by the appropriate agency of the United States, the
commission shall promptly report the amount required for
replacement to the governor and the governor shall, at the earliest
opportunity, submit to the legislature a request for the
appropriation of that amount. This subsection shall not be
construed to relieve this state of its obligation with respect to
funds received prior to July 1, 1941, under the provisions of title
III
of the social security act, chapter 531, 49 Stat. 620, 42
U.S.C.
USC 501 to 504.
(5) If any funds expended or disbursed by the commission are
found by the appropriate agency of the United States to have been
lost or expended for purposes other than, or in amounts in excess
of, those found necessary by that agency of the United States for
the proper administration of this act, and if these funds are
replaced as provided in subsection (4) by money appropriated for
that purpose from the general fund of this state, then the director
who approved the expenditure or disbursement of those funds for
those purposes or in those amounts, shall be liable to this state
in an amount equal to the sum of money appropriated to replace
those funds. The director shall be required by the governor to post
a proper bond in a sum not less than $25,000.00 to cover his or her
liability as prescribed in this section, the cost of the bond to be
paid from the general fund of this state.
(6) There is created in the department of treasury a separate
fund to be known as the contingent fund (Michigan employment
security act) into which shall be deposited all solvency taxes
collected under section 19a and all interest on contributions,
penalties, and damages collected under this act. Except as
otherwise
provided in subsections (7), (8), and (9), and (10), all
amounts in the contingent fund (Michigan employment security act)
and all earnings on those amounts are continuously appropriated
without regard to fiscal year for the administration of the
unemployment agency and for the payment of interest on advances
from the federal government to the unemployment compensation fund
under section 1201 of title XII of the social security act, 42
U.S.C.
USC 1321, to be expended only if authorized by the
unemployment agency. Money deposited from the solvency taxes
collected under section 19a shall not be used for the
administration of the unemployment agency, except for the repayment
of loans from the state treasury and interest on loans made under
section 19a(3). However, an authorization or expenditure shall not
be made as a substitution for a grant of federal funds or for any
portion of a grant that, in the absence of an authorization, would
be available to the commission. Immediately upon receipt of
administrative grants from the appropriate agency of the United
States to cover administrative costs for which the commission has
authorized and made expenditures from the contingent fund, those
grants shall be transferred to the contingent fund to the extent
necessary to reimburse the contingent fund for the amount of those
expenditures. Amounts needed to refund interest, damages, and
penalties erroneously collected shall be withdrawn and expended for
those purposes from the contingent fund upon order of the
unemployment agency. Any amount authorized to be expended for
administration under this section may be transferred to the
administration fund. An amount not needed for the purpose for which
authorized shall, upon order of the unemployment agency, be
returned to the contingent fund. Amounts needed to refund
erroneously collected solvency taxes shall be withdrawn and
expended for that purpose upon order of the unemployment agency.
(7) There is created in the department of treasury contingent
fund a separate fund to be known as the special fraud control fund
(Michigan employment security act). The special fraud control fund
shall consist of money collected or received by the unemployment
insurance agency as follows:
(a) All interest and penalties collected under section 62.
(b) All gifts to, interest on, or profits earned by the
special fraud control fund.
(c) The money in the special fraud control fund is
continuously appropriated only to the unemployment insurance agency
and may not be transferred or otherwise made available to any other
state agency.
(d) All amounts in the special fraud control fund are to be
used first for the acquisition of packaged software that has a
proven record of success with the detection and collection of
unemployment benefit overpayments and then for administrative costs
associated with the prevention, discovery, and collection of
unemployment benefit overpayments, as included in the biennial
budget of the unemployment insurance agency and approved by the
legislature. The unemployment insurance agency shall submit a
report to the clerk of the house of representatives and the
secretary of the senate at the close of the 2-year period that
begins on the effective date of the amendatory act that added this
subsection, to show how the money from the special fraud control
fund was used and the results obtained from the special fraud
control fund.
(8) (7)
On June 30, 2002, the
unemployment agency shall
authorize the withdrawal of $79,500,000.00 from the contingent fund
(Michigan employment security act) for deposit into the general
fund.
(9) (8)
At the close of the state fiscal
year in 2002 and each
year after 2002, all funds in the contingent fund (Michigan
employment security act) in excess of $15,000,000.00 shall lapse to
the unemployment trust fund.
(10) (9)
The unemployment agency shall
authorize the
withdrawal of $10,000,000.00 from the contingent fund (Michigan
employment security act) for deposit into the general fund for the
fiscal year ending September 30, 2004.
Sec. 15. (a) Contributions unpaid on the date on which they
are due and payable, as prescribed by the commission, shall bear
interest
at the rate of 1% per month, computed on a day to day day-
to-day basis for each day the delinquency is unpaid, from and after
that date until payment plus accrued interest is received by the
commission. Amounts illegally obtained or previously withheld from
payment and damages that are recovered by the commission under
section 54(a) and (b) and sections 54a to 54c of this act shall
bear interest at the rate of 1% per month, computed on a day-to-day
basis for each day the amounts remain unpaid until payment plus
accrued interest is received by the commission. The interest on
unpaid contributions, exclusive of penalties, shall not exceed 50%
of the amount of contributions due at due date. Interest and
penalties collected pursuant to this section shall be paid into the
contingent fund, except that interest and penalties collected under
section 62 shall be paid into the special fraud control fund. The
commission may cancel any interest and any penalty when it is shown
that the failure to pay on or before the last day on which the tax
could have been paid without interest and penalty was not the
result of negligence, intentional disregard of the rules of the
commission, or fraud.
(b) The commission may make assessments against an employer,
claimant, employee of the commission, or third party who fails to
pay contributions, reimbursement payments in lieu of contributions,
penalties, forfeitures, or interest as required by this act. The
commission shall immediately notify the employer, claimant,
employee of the commission, or third party of the assessment in
writing by first-class mail. An assessment by the commission
against a claimant, an employee of the commission, or a third party
under this subsection shall be made only for penalties and interest
on those penalties for violations of section 54(a) or (b) or
sections 54a to 54c. The assessment, which shall constitute a
determination, shall be final unless the employer, claimant,
employee of the commission, or third party files with the
commission an application for a redetermination of the assessment
in accordance with section 32a. A review by the commission or an
appeal to a referee or the appeal board on the assessment shall not
reopen a question concerning an employer's liability for
contributions or reimbursement payments in lieu of contributions,
unless the employer was not a party to the proceeding or decision
where the basis for the assessment was determined. An employer may
pay an assessment under protest and file an action to recover the
amount paid as provided under subsection (d). Unless an assessment
is paid within 15 days after it becomes final the commission may
issue a warrant under its official seal for the collection of an
amount required to be paid pursuant to the assessment. The
commission through its authorized employees, under a warrant
issued, may levy upon and sell the property of the employer that is
used in connection with the employer's business, or that is subject
to a notice to withhold, found within the state, for the payment of
the amount of the contributions including penalties, interests, and
the cost of executing the warrant. Property of the employer used in
connection with the employer's business shall not be exempt from
levy under the warrant. Wages subject to a notice to withhold shall
be exempt to the extent the wages are exempt from garnishment under
the laws of this state. The warrant shall be returned to the
commission together with the money collected by virtue of the
warrant within the time specified in the warrant which shall not be
less than 20 or more than 90 days after the date of the warrant.
The commission shall proceed upon the warrant in all respects and
with like effect and in the same manner as prescribed by law in
respect to executions issued against property upon judgments by a
court of record. The state, through the commission or some other
officer or agent designated by it, may bid for and purchase
property sold under the provisions of this subsection. If an
employer, claimant, employee of the commission, or third party, as
applicable, is delinquent in the payment of a contribution,
reimbursement payment in lieu of contribution, penalty, forfeiture,
or interest provided for in this act, the commission may give
notice of the amount of the delinquency served either personally or
by mail, to a person or legal entity, including the state and its
subdivisions, that has in its possession or under its control a
credit or other intangible property belonging to the employer,
claimant, employee of the commission, or third party, or who owes a
debt to the employer, claimant, employee of the commission, or
third party at the time of the receipt of the notice. A person or
legal entity so notified shall not transfer or make a disposition
of the credit, other intangible property, or debt without retaining
an amount sufficient to pay the amount specified in the notice
unless
the commission unemployment
agency consents to a transfer or
disposition or 45 days have elapsed from the receipt of the notice.
A
person or legal entity so notified shall advise the commission
unemployment agency within 5 days after receipt of the notice of a
credit, other intangible property, or debt, which is in its
possession, under its control, or owed by it. A person or legal
entity that is notified and that transfers or disposes of credits
or personal property in violation of this section is liable to the
commission
unemployment agency for the value of the property or the
amount of the debts thus transferred or paid, but not more than the
amount specified in the notice. An amount due a delinquent
employer,
claimant, employee of the commission unemployment agency,
or third party subject to a notice to withhold shall be paid to the
commission
unemployment agency upon service upon the debtor of a
warrant issued under this section.
(c) In addition to the mode of collection provided in
subsection (b), if, after due notice, an employer defaults in
payment of contributions or interest on the contributions, or a
claimant,
employee of the commission unemployment
agency, or third
party defaults in the payment of a penalty or interest on a
penalty,
the commission unemployment
agency may bring an action at
law in a court of competent jurisdiction to collect and recover the
amount of a contribution, and any interest on the contribution, or
the penalty or interest on the penalty, and in addition 10% of the
amount of contributions or penalties found to be due, as damages.
An
employer, claimant, employee of the commission unemployment
agency, or third party adjudged in default shall pay costs of the
action.
An action by the commission unemployment
agency against a
claimant,
employee of the commission unemployment
agency, or third
party under this subsection shall be brought only to recover
penalties and interest on those penalties for violations of section
54(a) or (b) or sections 54a to 54c. Civil actions brought under
this section shall be heard by the court at the earliest possible
date. If a judgment is obtained against an employer for
contributions and an execution on that judgment is returned
unsatisfied, the employer may be enjoined from operating and doing
business in this state until the judgment is satisfied. The circuit
court of the county in which the judgment is docketed or the
circuit court for the county of Ingham may grant an injunction upon
the
petition of the commission unemployment
agency. A copy of the
petition for injunction and a notice of when and where the court
shall act on the petition shall be served on the employer at least
21 days before the court may grant the injunction.
(d) An employer or employing unit improperly charged or
assessed contributions provided for under this act or a claimant,
employee
of the commission unemployment
agency, or third party
improperly assessed a penalty under this act and who paid the
contributions or penalty under protest within 30 days after the
mailing of the notice of determination of assessment, may recover
the amount improperly collected or paid, together with interest, in
any
proper action against the commission unemployment agency. The
circuit court of the county in which the employer or employing unit
or
claimant, employee of the commission unemployment agency, or
third party resides, or, in the case of an employer or employing
unit, in which is located the principal office or place of business
of the employer or employing unit, shall have original jurisdiction
of an action to recover contributions improperly paid or collected
or a penalty improperly assessed whether or not the charge or
assessment
has been reviewed by the commission unemployment agency
or heard or reviewed by a referee or the appeal board. The court
shall not have jurisdiction of the action unless written notice of
claim
is given to the commission unemployment
agency at least 30
days before the institution of the action. In an action to recover
contributions paid or collected or penalties assessed, the court
shall allow costs to such an extent and in a manner as it may
consider proper. Either party to the action shall have the right of
appeal, as is now provided by law, in other civil actions. An
action
by a claimant, employee of the commission unemployment
agency, or third party against the commission unemployment agency
under this subsection shall be brought only to recover penalties
and interest on those penalties improperly assessed by the
commission
unemployment agency under section 54(a) or (b) or
sections 54a to 54c. If a final judgment is rendered in favor of
the plaintiff in an action to recover the amount of contributions
illegally
collected or charged, the treasurer of the commission
unemployment agency, upon receipt of a certified copy of the final
judgment, shall pay the amount of contributions illegally collected
or charged or penalties assessed from the clearing account, and pay
interest as may be allowed by the court, in an amount not to exceed
the actual earnings of the contributions as may have been found to
have been illegally collected or charged, from the contingent fund.
(e) Except for liens and encumbrances recorded before the
filing of the notice provided for in this section, all
contributions, interest, and penalties payable under this act to
the
commission unemployment
agency from an employer, claimant,
employee
of the commission unemployment
agency, or third party that
neglects to pay the same when due shall be a first and prior lien
upon all property and rights to property, real and personal,
belonging
to the employer, claimant, employee of the commission
unemployment agency, or third party. The lien shall continue until
the liability for that amount or a judgment arising out of the
liability is satisfied or becomes unenforceable by reason of lapse
of time. The lien shall attach to the property and rights to
property
of the employer, claimant, employee of the commission
unemployment agency, or third party, whether real or personal, from
and after the date that a report upon which the specific tax is
computed is required by this act to be filed. Notice of the lien
shall be recorded in the office of the register of deeds of the
county in which the property subject to the lien is situated, and
the register of deeds shall receive the notice for recording. This
subsection
shall apply applies only to penalties and interest on
those penalties assessed by the commission against a claimant,
employee of the commission, or third party for violations of
section 54(a) or (b) or sections 54a to 54c.
If there is a distribution of an employer's assets pursuant to
an order of a court under the laws of this state, including a
receivership, assignment for benefit of creditors, adjudicated
insolvency, composition, or similar proceedings, contributions then
or thereafter due shall be paid in full before all other claims
except for wages and compensation under the worker's disability
compensation
act of 1969, Act No. 317 of the Public Acts of 1969,
being
sections 418.101 to 418.941 of the Michigan Compiled Laws
1969 PA 317, MCL 418.101 to 418.941. In the distribution of estates
of decedents, claims for funeral expenses and expenses of last
sickness shall also be entitled to priority.
(f) An injunction shall not issue to stay proceedings for
assessment or collection of contributions, or interest or penalty
on contributions, levied and required by this act.
(g) A person or employing unit, that acquires the
organization, trade, business, or 75% or more of the assets from an
employing
unit, as a successor defined described
in section 41(2),
is liable for contributions and interest due to the commission from
the transferor at the time of the acquisition in an amount not to
exceed the reasonable value of the organization, trade, business,
or assets acquired, less the amount of a secured interest in the
assets owned by the transferee that are entitled to priority. The
transferor or transferee who has, not less than 10 days before the
acquisition,
requested from the commission unemployment
agency in
writing a statement certifying the status of contribution liability
of the transferor shall be provided with that statement and the
transferee is not liable for any amount due from the transferor in
excess of the amount of liability computed as prescribed in this
subsection
and certified by the commission unemployment
agency. At
least 2 calendar days not including a Saturday, Sunday, or legal
holiday before the acceptance of an offer, the transferor, or the
transferor's real estate broker or other agent representing the
transferor, shall disclose to the transferee on a form provided by
the
commission unemployment
agency, the amounts of the transferor's
outstanding unemployment tax liability, unreported unemployment tax
liability, and the tax payments, tax rates, and cumulative benefit
charges for the most recent 5 years, a listing of all individuals
currently employed by the transferor, and a listing of all
employees separated from employment with the transferor in the most
recent 12 months. This form shall specify such other information,
as
determined by the commission unemployment
agency, as would be
required for a transferee to estimate future unemployment
compensation costs based on the transferor's benefit charge and tax
reporting
and payment experience with the commission unemployment
agency. Failure of the transferor, or the transferor's real estate
broker or other agent representing the transferor, to provide
accurate information required by this subsection is a misdemeanor
punishable by imprisonment for not more than 90 days, or a fine of
not more than $2,500.00, or both. In addition, the transferor, or
the transferor's real estate broker or other agent representing the
transferor, is liable to the transferee for any consequential
damages resulting from the failure to comply with this subsection.
However, the real estate broker or other agent is not liable for
consequential damages if he or she exercised good faith in
compliance with the disclosure of information. The remedy provided
the transferee is not exclusive, and is not to be construed to
reduce any other right or remedy against any party provided for in
this or any other act. Nothing in this subsection shall be
construed to decrease the liability of the transferee as a
successor in interest, or to prevent the transfer of a rating
account balance as provided in this act. The foregoing provisions
are
in addition to the remedies the commission unemployment agency
has against the transferor.
(h) If a part of a deficiency in payment of the employer's
contribution to the fund is due to negligence or intentional
disregard
of the rules of the commission unemployment
agency, but
without intention to defraud, 5% of the total amount of the
deficiency, in addition to the deficiency and in addition to all
other interest charges and penalties provided herein, shall be
assessed, collected, and paid in the same manner as if it were a
deficiency. If a part of a deficiency is determined in an action at
law to be due to fraud with intent to avoid payment of
contributions to the fund, then the judgment rendered shall include
an amount equal to 50% of the total amount of the deficiency, in
addition to the deficiency and in addition to all other interest
charges and penalties provided herein.
(i) If an employing unit fails to make a report as reasonably
required
by the rules of the commission unemployment
agency
pursuant
to this act, the commission unemployment
agency may make
an estimate of the liability of that employing unit from
information it may obtain and, according to that estimate so made,
assess the employing unit for the contributions, penalties, and
interest
due. The commission unemployment
agency shall have the
power only after a default continues for 30 days and after the
commission
unemployment agency has determined that the default of
the employing unit is willful.
(j) An assessment or penalty with respect to contributions
unpaid is not effective for any period before the 3 calendar years
preceding the date of the assessment.
(k) The rights respecting the collection of contributions and
the levy of interest and penalties and damages made available to
the
commission unemployment
agency by this section is are
additional
to other powers and rights vested in the commission in
pursuance
of the unemployment agency
under other provisions of this
act.
The commission unemployment
agency is not precluded from
exercising any of the collection remedies provided for by this act
even though an application for a redetermination or an appeal is
pending final disposition.
(l) A person recording a lien provided for in this section
shall pay a fee of $2.00 for recording a lien and a fee of $2.00
for recording a discharge of a lien.
Sec. 54. (a) A person who willfully violates or intentionally
fails to comply with any of the provisions of this act, or a
regulation
of the commission unemployment
agency promulgated under
the authority of this act for which a penalty is not otherwise
provided
by this act is punishable subject
to sanctions as provided
in subdivision (i), (ii), (iii), or (iv), notwithstanding any other
statute of this state or of the United States:
(i) If the commission determines that an amount has been
obtained or withheld as a result of the intentional failure to
comply
with this act, the commission unemployment
agency may
recover the amount obtained as a result of the intentional failure
to comply plus damages equal to 3 times that amount.
(ii) The commission unemployment agency may refer the matter to
the prosecuting attorney of the county in which the alleged
violation
occurred for prosecution. If the commission unemployment
agency has not made its own determination under subdivision (i), the
penalty
recovery sought by the prosecutor shall include the amount
described in subdivision (i) and shall also include 1 or more of the
following penalties:
(A) If the amount obtained or withheld from payment as a
result of the intentional failure to comply is less than
$25,000.00, then 1 of the following:
(I) Imprisonment for not more than 1 year.
(II) The performance of community service of not more than 1
year but not to exceed 2,080 hours.
(III) A combination of (I) and (II) that does not exceed 1
year.
(B) If the amount obtained or withheld from payment as a
result of the intentional failure to comply is $25,000.00 or more
but less than $100,000.00, then 1 of the following:
(I) Imprisonment for not more than 2 years.
(II) The performance of community service of not more than 2
years but not to exceed 4,160 hours.
(III) A combination of (I) and (II) that does not exceed 2
years.
(C) If the amount obtained or withheld from payment as a
result of the intentional failure to comply is more than
$100,000.00, then 1 of the following:
(I) Imprisonment for not more than 5 years.
(II) The performance of community service of not more than 5
years but not to exceed 10,400 hours.
(III) A combination of (I) and (II) that does not exceed 5
years.
(iii) If the commission unemployment agency determines that an
amount has been obtained or withheld as a result of a knowing
violation
of this act, the commission unemployment
agency may
recover the amount obtained as a result of the knowing violation
and may also recover damages equal to 3 times that amount.
(iv) The commission unemployment agency may refer a matter
under subdivision (iii) to the prosecuting attorney of the county in
which the alleged violation occurred for prosecution. If the
commission
unemployment agency has not made its own determination
under
subdivision (iii), the penalty recovery sought
by the
prosecutor shall include the amount described in subdivision (iii)
and shall also include 1 or more of the following penalties:
(A) If the amount obtained or withheld from payment as a
result of the knowing violation is $100,000.00 or less, then 1 of
the following:
(I) Imprisonment for not more than 1 year.
(II) The performance of community service of not more than 1
year but not to exceed 2,080 hours.
(III) A combination of (I) and (II) that does not exceed 1
year.
(B) If the amount obtained or withheld from payment as a
result of the knowing violation is more than $100,000.00, then 1 of
the following:
(I) Imprisonment for not more than 2 years.
(II) The performance of community service of not more than 2
years but not to exceed 4,160 hours.
(III) A combination of (I) and (II) that does not exceed 2
years.
(b) Any employing unit or an officer or agent of an employing
unit,
a claimant, an employee of the commission unemployment
agency, or any other person who makes a false statement or
representation knowing it to be false, or knowingly and willfully
with intent to defraud fails to disclose a material fact, to obtain
or increase a benefit or other payment under this act or under the
unemployment compensation law of any state or of the federal
government, either for himself or herself or any other person, to
prevent or reduce the payment of benefits to an individual entitled
thereto or to avoid becoming or remaining a subject employer, or to
avoid or reduce a contribution or other payment required from an
employing unit under this act or under the unemployment
compensation law of any state or of the federal government, as
applicable, is subject to administrative fines and is punishable as
follows, notwithstanding any other penalties imposed under any
other statute of this state or of the United States:
(i) If the amount obtained as a result of the knowing false
statement or representation or the knowing and willful failure to
disclose
a material fact is less than $500.00, the commission
unemployment agency may recover the amount obtained as a result of
the knowing false statement or representation or the knowing and
willful failure to disclose a material fact and may also recover
damages equal to 2 times that amount. For a second or subsequent
violation described in this subdivision, the unemployment agency
may recover damages equal to 4 times the amount obtained.
(ii) If the amount obtained as a result of the knowing false
statement or representation or the knowing and willful failure to
disclose
a material fact is $500.00 or more, the commission
unemployment agency shall attempt to recover the amount obtained as
a result of the knowing false statement or representation or the
knowing and willful failure to disclose a material fact and may
also
recover damages equal to 4 times that amount. The commission
unemployment agency may refer the matter to the prosecuting
attorney of the county in which the alleged violation occurred for
prosecution.
If the commission unemployment
agency has not made its
own
determination under this subdivision, the penalty recovery
sought by the prosecutor shall include the amount described in this
subdivision and shall also include 1 or more of the following
penalties if the amount obtained is $1,000.00 or more:
(A) If the amount obtained or withheld from payment as a
result of the knowing false statement or representation or the
knowing and willful failure to disclose a material fact is
$1,000.00 or more but less than $25,000.00, then 1 of the
following:
(I) Imprisonment for not more than 1 year.
(II) The performance of community service of not more than 1
year but not to exceed 2,080 hours.
(III) A combination of (I) and (II) that does not exceed 1
year.
(B) If the amount obtained or withheld from payment as a
result of the knowing false statement or representation or the
knowing and willful failure to disclose a material fact is
$25,000.00 or more, then 1 of the following:
(I) Imprisonment for not more than 2 years.
(II) The performance of community service of not more than 2
years but not to exceed 4,160 hours.
(III) A combination of (I) and (II) that does not exceed 2
years.
(C) If the knowing false statement or representation or the
knowing and willful failure to disclose a material fact made to
obtain or withhold an amount from payment does not result in a loss
to
the commission, then a penalty recovery
shall be sought equal to
3 times the amount that would have been obtained by the knowing
false statement or representation or the knowing and willful
failure to disclose a material fact, but not less than $1,000.00,
and 1 of the following:
(I) Imprisonment for not more than 2 years.
(II) The performance of community service of not more than 2
years but not to exceed 4,160 hours.
(III) A combination of (I) and (II) that does not exceed 2
years.
(c) (1) Any employing unit or an officer or agent of an
employing unit or any other person failing to submit, when due, any
contribution report, wage and employment report, or other reports
lawfully
prescribed and required by the commission unemployment
agency
shall be subject to the assessment of a
penalty an
administrative fine for each report not submitted within the time
prescribed
by the commission unemployment
agency, as follows: In
the case of contribution reports not received within 10 days after
the
end of the reporting month the penalty fine shall be 10% of the
contributions due on the reports but not less than $5.00 or more
than $25.00 for a report. However, if the tenth day falls on a
Saturday,
Sunday, legal holiday, or other commission unemployment
agency nonwork day, the 10-day period shall run until the end of
the next day which is not a Saturday, Sunday, legal holiday, or
other
commission unemployment
agency nonwork day. In the case of
all
other reports referred to in this subsection, the penalty fine
shall be $10.00 for a report.
(2) Notwithstanding subdivision (1), any employer or an
officer or agent of an employer or any other person failing to
submit, when due, any quarterly wage detail report required by
section
13(2) shall be is subject to a penalty an administrative
fine of $25.00 for each untimely report.
(3)
When If a report is filed after the prescribed time and it
is shown to the satisfaction of the commission that the failure to
submit
the report was due to reasonable cause, a penalty fine shall
not
be imposed. The assessment of a penalty fine as provided in
this
subsection shall constitute constitutes
a final determination
which
shall be final unless the employer
files with the commission
an application with the unemployment agency for a redetermination
of the assessment in accordance with section 32a.
(d)
If any commissioner, employee
, or agent of the commission
unemployment
agency or member of the appeal board
willfully makes a
disclosure
of discloses confidential information obtained from any
employing unit or individual in the administration of this act for
any purpose inconsistent with or contrary to the purposes of this
act,
or a person who having obtained obtains
a list of applicants
for
work , or of
claimants or recipients of benefits
, under this
act
shall use or permit the uses
or permits use of that list for a
political purpose or for a purpose inconsistent with or contrary to
the
purposes of this act, he or she is guilty of a misdemeanor and
upon
conviction shall be punished punishable
by imprisonment for
not
more than 90 days , or by
a fine of not more than $1,000.00, or
both.
Notwithstanding the preceding sentence, if any commissioner,
commission
unemployment agency employee, agent of the commission
unemployment agency, or member of the board of review knowingly,
intentionally, and for financial gain, makes an illegal disclosure
of confidential information obtained under section 13(2), he or she
is guilty of a felony, punishable by imprisonment for not more than
1 year and 1 day.
(e)
A person who, without proper authority from the commission
unemployment agency, represents himself or herself to be an
employee of the commission to an employing unit or person for the
purpose of securing information regarding the unemployment or
employment
record of an individual is guilty of a misdemeanor and
upon
conviction shall be punished punishable
by imprisonment for
not
more than 90 days , or by
a fine of not more than $1,000.00, or
both.
(f) A person associated with a college, university, or public
agency of this state who makes use of any information obtained from
the
commission unemployment
agency in connection with a research
project of a public service nature, in a manner as to reveal the
identity of any individual or employing unit from or concerning
whom
the information was obtained by the commission unemployment
agency, or for any purpose other than use in connection with that
research
project, is guilty of a misdemeanor and upon conviction
shall
be punished punishable by imprisonment for not more than 90
days , or by a fine of not more than $1,000.00, or
both.
(g) As used in this section, "person" includes an individual,
copartnership, joint venture, corporation, receiver, or trustee in
bankruptcy.
(h)
This section shall apply applies
even if the amount
obtained or withheld from payment has been reported or reported and
paid by an individual involved in a violation of subsection (a) or
(b).
(i) If a determination is made that an individual has violated
this
section, the individual is subject to the penalty provisions
of
this section and, where if
applicable, the requirements of
section 62.
(j) Amounts recovered by the commission under subsection (a)
or
(b) shall be credited first to the
unemployment compensation
fund and thereafter amounts recovered that are in excess of the
amounts obtained or withheld as a result of the violation of
subsection
(a) and (b) shall be credited to the penalty and
interest
account of the contingent fund. Fines and penalties
Amounts recovered by the commission under subsections (c), (d),
(e), and (f) shall be credited to the penalty and interest account
of the contingent fund in accordance with section 10(6).
(k) Amounts recovered by the unemployment agency under
subsection (b) shall be credited as follows:
(i) Deductions from unemployment insurance benefits shall be
applied solely to the amount of the benefits liable to be repaid
under this section.
(ii) All other recoveries shall be applied first to
administrative sanctions and damages, then to interest, and then to
the amount liable to be repaid. The amounts applied to
administrative sanctions, damages, and interest shall be credited
to the special fraud control fund created in section 10.
(l) (k)
The revisions in the penalties in
subsections (a) and
(b) provided by the 1991 amendatory act that added this subsection
shall
apply to conduct that began before
April 1, 1992, but that
continued on or after April 1, 1992, and to conduct that began on
or after April 1, 1992.
Sec.
62. (1) (a) If
the commission unemployment
agency
determines that a person has obtained benefits to which that person
is not entitled, the commission may recover a sum equal to the
amount received plus interest by 1 or more of the following
methods:
(1) deduction
(a)
Deduction from benefits payable to the
individual. , (2)
payment
(b)
Payment by the individual to the
commission in cash. , or
(3)
deduction
(c) Deduction from a tax refund payable to the individual as
provided
under section 30a of Act No. 122 of the Public Acts of
1941,
being section 205.30a of the Michigan Compiled Laws 1941 PA
122, MCL 205.30a.
(2)
Deduction from benefits payable to the
individual shall be
is limited to not more than 20% of each weekly benefit check due
the
claimant. The commission unemployment
agency shall not recover
improperly paid benefits from an individual more than 3 years, or
more than 6 years in the case of a violation of section 54(a) or
(b) or sections 54a to 54c, after the date of receipt of the
improperly
paid benefits unless : (1) the
unemployment agency filed
a
civil action is filed in a court by the commission within the 3-
year
or 6-year period , (2) or
the individual made an intentional
false statement, misrepresentation, or concealment of material
information
to obtain the benefits , or (3)
the commission
unemployment agency issued a determination requiring restitution
within
the 3-year or 6-year period. Furthermore, except Except in
a
case of an intentional false statement, misrepresentation, or
concealment of material information, the commission may waive
recovery of an improperly paid benefit or interest if the payment
was not the fault of the individual and if repayment would be
contrary to equity and good conscience.
(3) (b)
For benefit years beginning before the
conversion date
prescribed
in section 75 October 1, 2000, if the commission
unemployment agency determines that a person has intentionally made
a false statement or misrepresentation or has concealed material
information to obtain benefits, whether or not the person obtains
benefits by or because of the intentional false statement,
misrepresentation, or concealment of material information, the
person shall, in addition to any other applicable interest and
penalties, have all of his or her uncharged credit weeks with
respect to the benefit year in which the act occurred canceled as
of
the date the commission unemployment
agency receives notice of,
or initiates investigation of, the possible false statement,
misrepresentation, or concealment of material information,
whichever date is earlier. Before receiving benefits in a benefit
year established within 2 years after cancellation of uncharged
credit weeks under this subsection, the individual, in addition to
making
the restitution of benefits established under subsection (a)
subsections
(1) and (2), may be liable to the commission
unemployment agency, by cash, deduction from benefits, or deduction
from a tax refund, for an additional amount as determined by the
commission
unemployment agency under this act. Restitution
resulting from the intentional false statement, misrepresentation,
or concealment of material information is not subject to the 20%
limitation
provided in subsection (a) (2). For benefit years
beginning
after the conversion date prescribed in section 75 on or
after
October 1, 2000, if the commission unemployment agency
determines that a person has intentionally made a false statement
or misrepresentation or has concealed material information to
obtain benefits, whether or not the person obtains benefits by or
because of the intentional false statement, misrepresentation, or
concealment of material information, the person shall, in addition
to any other applicable interest and penalties, have his or her
rights to benefits for the benefit year in which the act occurred
canceled
as of the date the commission unemployment
agency receives
notice of, or initiates investigation of, a possible false
statement, misrepresentation, or concealment of material
information, whichever date is earlier, and wages used to establish
that benefit year shall not be used to establish another benefit
year. Before receiving benefits in a benefit year established
within 2 years after cancellation of rights to benefits under this
subsection, the individual, in addition to making the restitution
of
benefits established under subsection (a) subsections (1) and
(2), may be liable to the commission unemployment agency, by cash,
deduction from benefits, or deduction from a tax refund, for an
additional
amount as otherwise determined by the commission
unemployment agency under this act. Restitution resulting from the
intentional false statement, misrepresentation, or concealment of
material information is not subject to the 20% limitation provided
in
subsection (a) (2).
(4) (c)
Any determination made by the commission
unemployment
agency under this section is final unless an application for a
redetermination
is filed with the commission unemployment
agency in
accordance with section 32a.
(5) (d)
The commission unemployment agency shall take the
action necessary to recover all benefits improperly obtained or
paid under this act plus interest, and to enforce all penalties
under
subsection (b) (3).
(6) Interest recovered under this section shall be deposited
in the special fraud control fund created in section 10. The
interest so deposited shall be expended first to acquire, through a
competitive bid process, packaged software that has a proven record
of success in detecting and collecting unemployment benefit
overpayments, before being applied to other administrative
expenses.