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10  AN ACT concerning the employment security law; relating to wage re-
11    ports; amending K.S.A. 1996 Supp. 44-710 and 44-717 and repealing
12    the existing section sections.
13
14  Be it enacted by the Legislature of the State of Kansas:
15    Section 1.  K.S.A. 1996 Supp. 44-717 is hereby amended to read as
16  follows: 44-717. (a) Penalties on past-due reports, interest on past-due
17  contributions, payments in lieu of contributions and benefit cost pay-
18  ments. Any employer or any officer or agent of an employer, who fails to
19  file any wage report or contribution return when due, as required by the
20  secretary of human resources, or within a five-day grace period, by the
21  last day of the month following the close of each calendar quarter
22  to which they are related shall pay a penalty as provided by this sub-
23  section (a) for each month or fraction of a month until the report or return
24  is received by the secretary of human resources. However, wage reports
25  shall be deemed received when postmarked. The penalty for each month
26  or fraction of a month shall be an amount equal to .05% of the total wages
27  paid by the employer during the quarter, except that no penalty shall be
28  less than $25 nor more than $200 for each such report or return not
29  timely filed. Payments in lieu of contributions shall be filed by the
30  last day of the month following the close of each calendar quarter
31  to which they are related. Contributions, payments in lieu of contri-
32  butions and benefit cost payments unpaid on the date on which they are
33  due and payable, as prescribed by the secretary of human resources, or
34  within a five-day grace period not filed by the last day of the month
35  following the last calendar quarter to which they are related, shall
36  bear interest at the rate of 1% per month or fraction of a month until
37  payment is received by the secretary of human resources except that an
38  employing unit, which is not theretofore subject to this law and which
39  becomes an employer and does not refuse to make the reports, returns
40  and contributions, payments in lieu of contributions and benefit cost pay-
41  ments required under this law, shall not be liable for such penalty or
42  interest if the wage reports and contribution returns required are filed
43  and the contributions, payments in lieu of contributions or benefit cost
HB 2121--Am.
                                     

 1  payments required are paid within 10 days following notification by the
 2  secretary of human resources that a determination has been made fixing
 3  its status as an employer subject to this law. Upon written request and
 4  good cause shown, the secretary of human resources may abate any pen-
 5  alty or interest or portion thereof provided for by this subsection (a).
 6  Interest amounting to less than $1 shall be waived by the secretary of
 7  human resources and shall not be collected. Penalties and interest col-
 8  lected pursuant to this subsection shall be paid into the special employ-
 9  ment security fund. For all purposes under this section, amounts assessed
10  as surcharges under subsection (j) or under K.S.A. 44-710a and amend-
11  ments thereto shall be considered to be contributions and shall be subject
12  to penalties and interest imposed under this section and to collection in
13  the manner provided by this section.
14    A wage report, a contribution return, a contribution, a payment
15  in lieu of contribution or a benefit cost payment is deemed filed
16  as of the date it is placed in the United States mail.
17    (b)  Collection. (1) If, after due notice, any employer defaults in pay-
18  ment of any penalty, contributions, payments in lieu of contributions,
19  benefit cost payments, or interest thereon the amount due may be col-
20  lected by civil action in the name of the secretary of human resources
21  and the employer adjudged in default shall pay the cost of such action.
22  Civil actions brought under this section to collect contributions, payments
23  in lieu of contributions, benefit cost payments, penalties, or interest
24  thereon from an employer shall be heard by the district court at the
25  earliest possible date and shall be entitled to preference upon the cal-
26  endar of the court over all other civil actions except petitions for judicial
27  review under this act and cases arising under the workmen's compensa-
28  tion act. All liability determinations of contributions due, payments in lieu
29  of contributions or benefit cost payments due shall be made within a
30  period of five years from the date such contributions, payments in lieu of
31  contributions or benefit cost payments were due except such determi-
32  nations may be made for any time when an employer has filed fraudulent
33  reports with intent to evade liability.
34    (2)  Any employing unit which is not a resident of this state and which
35  exercises the privilege of having one or more individuals perform service
36  for it within this state and any resident employing unit which exercises
37  that privilege and thereafter removes from this state, shall be deemed
38  thereby to appoint the secretary of state as its agent and attorney for the
39  acceptance of process in any civil action under this subsection. In insti-
40  tuting such an action against any such employing unit the secretary of
41  human resources shall cause such process or notice to be filed with the
42  secretary of state and such service shall be sufficient service upon such
43  employing unit and shall be of the same force and validity as if served
HB 2121--Am.
                                     

 1  upon it personally within this state. The secretary of human resources
 2  shall send notice immediately of the service of such process or notice,
 3  together with a copy thereof, by registered or certified mail, return receipt
 4  requested, to such employing unit at its last-known address and such
 5  return receipt, the affidavit of compliance of the secretary of human re-
 6  sources with the provisions of this section, and a copy of the notice of
 7  service, shall be appended to the original of the process filed in the court
 8  in which such civil action is pending.
 9    (3)  Any contractor, who is or becomes an employer under the pro-
10  visions of this act, who contracts with any subcontractor, who also is or
11  becomes an employer under the provisions of this act, shall be directly
12  liable for such contributions, penalties and interest due from the subcon-
13  tractor and the secretary of human resources shall have all of the remedies
14  of collection against the contractor under the provisions of this act as
15  though the services in question were performed directly for the contrac-
16  tor, unless the contractor requires the subcontractor to provide a good
17  and sufficient bond guaranteeing payment of all contributions, penalties
18  and interest due or to become due with respect to wages paid for em-
19  ployment on the contract. For the purpose of this subsection (b)(3), the
20  words, ``contractor'' and ``subcontractor'' mean and include individuals,
21  partnerships, firms or corporations, or other associations of persons en-
22  gaged in the business of the construction, alteration, repairing, disman-
23  tling or demolition of buildings, roads, bridges, viaducts, sewers, water
24  and gas mains, streets, disposal plants, water filters, tanks and towers,
25  airports, dams, levees and canals, oil and gas wells, water wells, pipelines,
26  and every other type of structure, project, development or improvement
27  coming within the definition of real property.
28    (4)  The district courts of this state shall entertain, in the manner
29  provided in subsections (b)(1), (b)(2) and (b)(3), actions to collect con-
30  tributions, payments in lieu of contributions, benefit cost payments and
31  other amounts owed including interest thereon for which liability has
32  accrued under the employment security law of any other state or of the
33  federal government.
34    (c)  Priorities under legal dissolutions or distributions. In the event of
35  any distribution of employer's assets pursuant to an order of any court
36  under the laws of this state, including but not limited to any probate
37  proceeding, interpleader, receivership, assignment for benefit of credi-
38  tors, adjudicated insolvency, composition or similar proceedings, contri-
39  butions or payments in lieu of contributions then or thereafter due shall
40  be paid in full from the moneys which shall first come into the estate,
41  prior to all other claims, except claims for wages of not more than $250
42  to each claimant, earned within six months of the commencement of the
43  proceedings. In the event of an employer's adjudication in bankruptcy,
HB 2121--Am.
                                     

 1  judicially confirmed extension proposal, or composition, under the federal
 2  bankruptcy act of 1898, as amended, contributions then or thereafter due
 3  shall be entitled to such priority as is provided in that act for taxes due
 4  any state of the United States.
 5    (d)  Assessments. If any employer fails to file a report or return re-
 6  quired by the secretary of human resources for the determination of con-
 7  tributions, or payments in lieu of contributions, or benefit cost payments,
 8  the secretary of human resources may make such reports or returns or
 9  cause the same to be made, on the basis of such information as the sec-
10  retary may be able to obtain and shall collect the contributions, payments
11  in lieu of contributions or benefit cost payments as determined together
12  with any interest due under this act. The secretary of human resources
13  shall immediately forward to the employer a copy of the assessment by
14  registered or certified mail to the employer's address as it appears on the
15  records of the agency, and such assessment shall be final unless the em-
16  ployer protests such assessment and files a corrected report or return for
17  the period covered by the assessment within 15 days after the mailing of
18  the copy of assessment. Failure to receive such notice shall not invalidate
19  the assessment. Notice in writing shall be presumed to have been given
20  when deposited as certified or registered matter in the United States mail,
21  addressed to the person to be charged with notice at such person's address
22  as it appears on the records of the agency.
23    (e) (1)  Lien. If any employer or person who is liable to pay contri-
24  butions, payments in lieu of contributions or benefit cost payments ne-
25  glects or refuses to pay the same after demand, the amount, including
26  interest and penalty, shall be a lien in favor of the state of Kansas, sec-
27  retary of human resources, upon all property and rights to property,
28  whether real or personal, belonging to such employer or person. Such
29  lien shall not be valid as against any mortgagee, pledgee, purchaser or
30  judgment creditor until notice thereof has been filed by the secretary of
31  human resources in the office of register of deeds in any county in the
32  state of Kansas, in which such property is located, and when so filed shall
33  be notice to all persons claiming an interest in the property of the em-
34  ployer or person against whom filed. The register of deeds shall enter
35  such notices in the financing statement record and shall also record the
36  same in full in miscellaneous record and index the same against the name
37  of the delinquent employer. The register of deeds shall accept, file, and
38  record such notice without prepayment of any fee, but lawful fees shall
39  be added to the amount of such lien and collected when satisfaction is
40  presented for entry. Such lien shall be satisfied of record upon the pres-
41  entation of a certificate of discharge by the state of Kansas, secretary of
42  human resources. Nothing contained in this subsection (e) shall be con-
43  strued as an invalidation of any lien or notice filed in the name of the
HB 2121--Am.
                                     

 1  unemployment compensation division or the employment security divi-
 2  sion and such liens shall be and remain in full force and effect until
 3  satisfied as provided by this subsection (e).
 4    (2)  Authority of secretary or authorized representative. If any em-
 5  ployer or person who is liable to pay any contributions, payments in lieu
 6  of contributions or benefit cost payments, including interest and penalty,
 7  neglects or refuses to pay the same within 10 days after notice and de-
 8  mand therefor, the secretary or the secretary's authorized representative
 9  may collect such contributions, payments in lieu of contributions or ben-
10  efit cost payments, including interest and penalty, and such further
11  amount as is sufficient to cover the expenses of the levy, by levy upon all
12  property and rights to property which belong to the employer or person
13  or which have a lien created thereon by this subsection (e) for the pay-
14  ment of such contributions, payments in lieu of contributions or benefit
15  cost payments, including interest and penalty. As used in this subsection
16    (e), ``property'' includes all real property and personal property, whether
17  tangible or intangible, except such property which is exempt under K.S.A.
18  60-2301 et seq., and amendments thereto. Levy may be made upon the
19  accrued salary or wages of any officer, employee or elected official of any
20  state or local governmental entity which is subject to K.S.A. 60-723 and
21  amendments thereto, by serving a notice of levy as provided in subsection
22    (d) of K.S.A. 60-304 and amendments thereto. If the secretary or the
23  secretary's authorized representative makes a finding that the collection
24  of the amount of such contributions, payments in lieu of contributions or
25  benefit cost payments, including interest and penalty, is in jeopardy, no-
26  tice and demand for immediate payment of such amount may be made
27  by the secretary or the secretary's authorized representative and, upon
28  failure or refusal to pay such amount, immediate collection of such
29  amount by levy shall be lawful without regard to the ten-day period pro-
30  vided in this subsection (e).
31    (3)  Seizure and sale of property. The authority to levy granted under
32  this subsection (e) includes the power of seizure by any means. A levy
33  shall extend only to property possessed and obligations existing at the
34  time thereof. In any case in which the secretary or the secretary's au-
35  thorized representative may levy upon property or rights to property, the
36  secretary or the secretary's authorized representative may seize and sell
37  such property or rights to property.
38    (4)  Successive seizures. Whenever any property or right to property
39  upon which levy has been made under this subsection (e) is not sufficient
40  to satisfy the claim of the secretary for which levy is made, the secretary
41  or the secretary's authorized representative may proceed thereafter and
42  as often as may be necessary, to levy in like manner upon any other
43  property or rights to property which belongs to the employer or person
HB 2121--Am.
                                     

 1  against whom such claim exists or upon which a lien is created by this
 2  subsection (e) until the amount due from the employer or person, to-
 3  gether with all expenses, is fully paid.
 4    (f)  Warrant. In addition or as an alternative to any other remedy
 5  provided by this section and provided that no appeal or other proceeding
 6  for review permitted by this law shall then be pending and the time for
 7  taking thereof shall have expired, the secretary of human resources or an
 8  authorized representative of the secretary may issue a warrant certifying
 9  the amount of contributions, payments in lieu of contributions, benefit
10  cost payments, interest or penalty, and the name of the employer liable
11  for same after giving 15 days prior notice. Upon request, service of final
12  notices shall be made by the sheriff within the sheriff's county, by the
13  sheriff's deputy or some person specially appointed by the secretary for
14  that purpose, or by the secretary's designee. A person specially appointed
15  by the secretary or the secretary's designee to serve final notices may
16  make service any place in the state. Final notices shall be served as fol-
17  lows:
18    (1)  Individual. Service upon an individual, other than a minor or in-
19  capacitated person, shall be made by delivering a copy of the final notice
20  to the individual personally or by leaving a copy at such individual's dwell-
21  ing house or usual place of abode with some person of suitable age and
22  discretion then residing therein, by leaving a copy at the business estab-
23  lishment of the employer with an officer or employee of the establish-
24  ment, or by delivering a copy to an agent authorized by appointment or
25  by law to receive service of process, but if the agent is one designated by
26  a statute to receive service, such further notice as the statute requires
27  shall be given. If service as prescribed above cannot be made with due
28  diligence, the secretary or the secretary's designee may order service to
29  be made by leaving a copy of the final notice at the employer's dwelling
30  house, usual place of abode or business establishment.
31    (2)  Corporations and partnerships. Service upon a domestic or for-
32  eign corporation or upon a partnership or other unincorporated associa-
33  tion, when by law it may be sued as such, shall be made by delivering a
34  copy of the final notice to an officer, partner or resident managing or
35  general agent thereof by leaving a copy at any business office of the em-
36  ployer with the person having charge thereof or by delivering a copy to
37  any other agent authorized by appointment or required by law to receive
38  service of process, if the agent is one authorized by law to receive service
39  and, if the law so requires, by also mailing a copy to the employer.
40    (3)  Refusal to accept service. In all cases when the person to be
41  served, or an agent authorized by such person to accept service of peti-
42  tions and summonses, shall refuse to receive copies of the final notice,
43  the offer of the duly authorized process server to deliver copies thereof
HB 2121--Am.
                                     

 1  and such refusal shall be sufficient service of such notice.
 2    (4)  Proof of service. (A) Every officer to whom a final notice or other
 3  process shall be delivered for service within or without the state, shall
 4  make return thereof in writing stating the time, place and manner of
 5  service of such writ, and shall sign such officer's name to such return.
 6    (B)  If service of the notice is made by a person appointed by the
 7  secretary or the secretary's designee to make service, such person shall
 8  make an affidavit as to the time, place and manner of service thereof in
 9  a form prescribed by the secretary or the secretary's designee.
10    (5)  Time for return. The officer or other person receiving a final no-
11  tice shall make a return of service promptly and shall send such return
12  to the secretary or the secretary's designee in any event within 10 days
13  after the service is effected. If the final notice cannot be served it shall
14  be returned to the secretary or the secretary's designee within 30 days
15  after the date of issue with a statement of the reason for the failure to
16  serve the same. The original return shall be attached to and filed with
17  any warrant thereafter filed.
18    (6)  Service by mail. (A) Upon direction of the secretary or the secre-
19  tary's designee, service by mail may be effected by forwarding a copy of
20  the notice to the employer by registered or certified mail to the employ-
21  er's address as it appears on the records of the agency. A copy of the
22  return receipt shall be attached to and filed with any warrant thereafter
23  filed.
24    (B)  The secretary of human resources or an authorized representative
25  of the secretary may file the warrant for record in the office of the clerk
26  of the district court in the county in which the employer owing such
27  contributions, payments in lieu of contributions, benefit cost payments,
28  interest, or penalty has business property. The warrant shall certify the
29  amount of contributions, payments in lieu of contributions, benefit cost
30  payments, interest and penalty due, and the name of the employer liable
31  for such amount. It shall be the duty of the clerk of the district court to
32  file such warrant of record and enter the warrant in the records of the
33  district court for judgment and decrees under the procedure prescribed
34  for filing transcripts of judgment.
35    (C)  The clerk shall enter, on the day the warrant is filed, the case on
36  the appearance docket, together with the amount and the time of filing
37  the warrant. From the time of filing such warrant, the amount of the
38  contributions, payments in lieu of contributions, benefit cost payments,
39  interest, and penalty, certified therein, shall have the force and effect of
40  a judgment of the district court until the same is satisfied by the secretary
41  of human resources or an authorized representative or attorney for the
42  secretary. Execution shall be issuable at the request of the secretary of
43  human resources, an authorized representative or attorney for the sec-
HB 2121--Am.
                                     

 1  retary, as is provided in the case of other judgments.
 2    (D)  Postjudgment procedures shall be the same as for judgments
 3  according to the code of civil procedure.
 4    (E)  Warrants shall be satisfied of record by payment to the clerk of
 5  the district court of the contributions, payments in lieu of contributions,
 6  benefit cost payments, penalty, interest to date, and court costs. Warrants
 7  may also be satisfied of record by payment to the clerk of the district
 8  court of all court costs accrued in the case and by filing a certificate by
 9  the secretary of human resources, certifying that the contributions, pay-
10  ments in lieu of contributions, benefit cost payments, interest and penalty
11  have been paid.
12    (g)  Remedies cumulative. The foregoing remedies shall be cumulative
13  and no action taken shall be construed as an election on the part of the
14  state or any of its officers to pursue any remedy or action under this
15  section to the exclusion of any other remedy or action for which provision
16  is made.
17    (h)  Refunds. If any individual, governmental entity or organization
18  makes application for refund or adjustment of any amount paid as con-
19  tributions, benefit cost payments or interest under this law and the sec-
20  retary of human resources determines that such amount or any portion
21  thereof was erroneously collected, except for amounts less than $1, the
22  secretary of human resources shall allow such individual or organization
23  to make an adjustment thereof without interest, in connection with sub-
24  sequent contribution payments, or if such adjustment cannot be made
25  the secretary of human resources shall refund the amount, except for
26  amounts less than $1, without interest, from the employment security
27  fund, except that all interest erroneously collected which has been paid
28  into the special employment security fund shall be refunded out of the
29  special employment security fund. No adjustment or refund shall be al-
30  lowed with respect to a payment as contributions, benefit cost payments
31  or interest unless an application therefor is made on or before whichever
32  of the following dates is later: (1) One year from the date on which such
33  payment was made; or (2) three years from the last day of the period with
34  respect to which such payment was made. For like cause and within the
35  same period adjustment or refund may be so made on the secretary's own
36  initiative. The secretary of human resources shall not be required to re-
37  fund any contributions, payments in lieu of contributions or benefit cost
38  payments based upon wages paid which have been used as base-period
39  wages in a determination of a claimant's benefit rights when justifiable
40  and correct payments have been made to the claimant as the result of
41  such determination.
42    (i)  Refund for reimbursing employer. Upon termination of an em-
43  ployer's business or termination of any election to make payments in lieu
HB 2121--Am.
                                     

 1  of contributions, a reimbursing employer may file for a refund of any
 2  payments made to the fund which are in excess of any regular or extended
 3  benefits which have been charged or could become chargeable to the
 4  reimbursing employer's account. No refund may be made within a
 5  twenty-four-month period following termination of a reimbursing em-
 6  ployer's business or election for payments in lieu of contributions.
 7    (j) (1)  Cash deposit or bond. If any contributing employer is delin-
 8  quent in making payments under the employment security law during any
 9  two quarters of the most recent four-quarter period, the secretary or the
10  secretary's authorized representative shall have the discretionary power
11  to require such contributing employer either to deposit cash or to file a
12  bond with sufficient sureties to guarantee the payment of contributions,
13  penalty and interest owed by such employer.
14    (2)  The amount of such cash deposit or bond shall be not less than
15  the largest total amount of contributions, penalty and interest reported
16  by the employer in two of the four calendar quarters preceding any de-
17  linquency. Such cash deposit or bond shall be required until the employer
18  has shown timely filing of reports and payment of contributions for four
19  consecutive calendar quarters.
20    (3)  Failure to file such cash deposit or bond shall subject the em-
21  ployer to a surcharge of 2.0% which shall be in addition to the rate of
22  contributions assigned to the employer under K.S.A. 44-710a and amend-
23  ments thereto. Contributions paid as a result of this surcharge shall not
24  be credited to the employer's experience rating account. This surcharge
25  shall be effective during the next full calendar year after its imposition
26  and during each full calendar year thereafter until the employer has filed
27  the required cash deposit or bond or has shown timely filing of reports
28  and payment of contributions for four consecutive calendar quarters.
29    (k)  Any officer, major stockholder or other person who has charge of
30  the affairs of an employer, which is an employing unit described in section
31  501(c)(3) of the federal internal revenue code of 1954 or which is any
32  other corporate organization or association, or any member or manager
33  of a limited liability company, or any public official, who willfully fails to
34  pay the amount of contributions, payments in lieu of contributions or
35  benefit cost payments required to be paid under the employment security
36  law on the date on which such amount becomes delinquent, shall be
37  personally liable for the total amount of the contributions, payments in
38  lieu of contributions or benefit cost payments and any penalties and in-
39  terest due and unpaid by such employing unit. The secretary or the se-
40  cretary's authorized representative may assess such person for the total
41  amount of contributions, payments in lieu of contributions or benefit cost
42  payments and any penalties, and interest computed as due and owing.
43  With respect to such persons and such amounts assessed, the secretary
HB 2121--Am.
                                     

 1  shall have available all of the collection remedies authorized or provided
 2  by this section.
 3    Sec.  2.  K.S.A. 1996 Supp. 44-710 is hereby amended to read
 4  as follows: 44-710. (a) Payment. Contributions shall accrue and be-
 5  come payable by each contributing employer for each calendar
 6  year in which the contributing employer is subject to the employ-
 7  ment security law with respect to wages paid for employment. Such
 8  contributions shall become due and be paid by each contributing
 9  employer to the secretary for the employment security fund in
10  accordance with such rules and regulations as the secretary may
11  adopt and shall not be deducted, in whole or in part, from the
12  wages of individuals in such employer's employ. In the payment of
13  any contributions, a fractional part of $.01 shall be disregarded
14  unless it amounts to $.005 or more, in which case it shall be in-
15  creased to $.01. Should contributions for any calendar quarter be
16  less than $1, no payment shall be required.
17    (b)  Rates and base of contributions. (1) Except as provided in par-
18  agraph (2) of this subsection, each contributing employer shall pay
19  contributions on wages paid by the contributing employer during
20  each calendar year with respect to employment as provided in
21  K.S.A. 44-710a and amendments thereto.
22    (2) (A)  If the congress of the United States either amends or
23  repeals the Wagner-Peyser act, the federal unemployment tax act,
24  the federal social security act, or subtitle C of chapter 23 of the
25  federal internal revenue code of 1986, or any act or acts supple-
26  mental to or in lieu thereof, or any part or parts of any such law,
27  or if any such law, or any part or parts thereof, are held invalid
28  with the effect that appropriations of funds by congress and grants
29  thereof to the state of Kansas for the payment of costs of admin-
30  istration of the employment security law are no longer available
31  for such purposes, or (B) if employers in Kansas subject to the
32  payment of tax under the federal unemployment tax act are
33  granted full credit against such tax for contributions or taxes paid
34  to the secretary of human resources, then, and in either such case,
35  beginning with the year in which the unavailability of federal ap-
36  propriations and grants for such purpose occurs or in which such
37  change in liability for payment of such federal tax occurs and for
38  each year thereafter, the rate of contributions of each contributing
39  employer shall be equal to the total of .5% and the rate of contri-
40  butions as determined for such contributing employer under
41  K.S.A. 44-710a and amendments thereto. The amount of contri-
42  butions which each contributing employer becomes liable to pay
43  under this paragraph (2) over the amount of contributions which
HB 2121--Am.
                                     

 1  such contributing employer would be otherwise liable to pay shall
 2  be credited to the employment security administration fund to be
 3  disbursed and paid out under the same conditions and for the same
 4  purposes as other moneys are authorized to be paid from the em-
 5  ployment security administration fund, except that, if the secretary
 6  determines that as of the first day of January of any year there is
 7  an excess in the employment security administration fund over the
 8  amount required to be disbursed during such year, an amount
 9  equal to such excess as determined by the secretary shall be trans-
10  ferred to the employment security fund.
11    (c)  Charging of benefit payments. (1) The secretary shall maintain
12  a separate account for each contributing employer, and shall credit
13  the contributing employer's account with all the contributions paid
14  on the contributing employer's own behalf. Nothing in the em-
15  ployment security law shall be construed to grant any employer or
16  individuals in such employer's service prior claims or rights to the
17  amounts paid by such employer into the employment security fund
18  either on such employer's own behalf or on behalf of such individ-
19  uals. Benefits paid shall be charged against the accounts of each
20  base period employer in the proportion that the base period wages
21  paid to an eligible individual by each such employer bears to the
22  total wages in the base period. Benefits shall be charged to con-
23  tributing employers' accounts and rated governmental employers'
24  accounts upon the basis of benefits paid during each twelve-month
25  period ending on the computation date.
26    (2) (A)  Benefits paid in benefit years established by valid new
27  claims shall not be charged to the account of a contributing em-
28  ployer or rated governmental employer who is a base period em-
29  ployer if the examiner finds that claimant was separated from the
30  claimant's most recent employment with such employer under any
31  of the following conditions: (i) Discharged for misconduct or gross
32  misconduct connected with the individual's work; or (ii) leaving
33  work voluntarily without good cause attributable to the claimant's
34  work or the employer.
35    (B)  Where base period wage credits of a contributing employer
36  or rated governmental employer represent part-time employment
37  and the claimant continues in that part-time employment with that
38  employer during the period for which benefits are paid, then that
39  employer's account shall not be charged with any part of the ben-
40  efits paid if the employer provides the secretary with information
41  as required by rules and regulations. For the purposes of this sub-
42  section (c)(2)(B), ``part-time employment'' means any employment
43  when an individual works concurrently for two or more employers
HB 2121--Am.
                                     

 1  and also works less than full-time for at least one of those employ-
 2  ers because the individual's services are not required for the cus-
 3  tomary, scheduled full-time hours prevailing at the work place or
 4  the individual does not customarily work the regularly scheduled
 5  full-time hours due to personal choice or circumstances.
 6    (C)  No contributing employer or rated governmental employ-
 7  er's account shall be charged with any extended benefits paid in
 8  accordance with the employment security law, except for weeks of
 9  unemployment beginning after December 31, 1978, all contrib-
10  uting governmental employers and governmental rated employers
11  shall be charged an amount equal to all extended benefits paid.
12    (D)  No contributing employer or rated governmental employ-
13  er's account will be charged for benefits paid a claimant while
14  pursuing an approved training course as defined in subsection (s)
15  of K.S.A. 44-703 and amendments thereto.
16    (E)  No contributing employer or rated governmental employ-
17  er's account shall be charged with respect to the benefits paid to
18  any individual whose base period wages include wages for services
19  not covered by the employment security law prior to January 1,
20  1978, to the extent that the employment security fund is reim-
21  bursed for such benefits pursuant to section 121 of public law 94-
22  566 (90 Stat. 2673).
23    (F)  With respect to weeks of unemployment beginning after
24  December 31, 1977, wages for insured work shall include wages
25  paid for previously uncovered services. For the purposes of this
26  subsection (c)(2)(F), the term ``previously uncovered services''
27  means services which were not covered employment, at any time
28  during the one-year period ending December 31, 1975, except to
29  the extent that assistance under title II of the federal emergency
30  jobs and unemployment assistance act of 1974 was paid on the
31  basis of such services, and which:
32    (i)  Are agricultural labor as defined in subsection (w) of K.S.A.
33  44-703 and amendments thereto or domestic service as defined in
34  subsection (aa) of K.S.A. 44-703 and amendments thereto, or
35    (ii)  are services performed by an employee of this state or a
36  political subdivision thereof, as provided in subsection (i)(3)(E) of
37  K.S.A. 44-703 and amendments thereto, or
38    (iii)  are services performed by an employee of a nonprofit ed-
39  ucational institution which is not an institution of higher education.
40    (3)  The examiner shall notify any base period employer whose
41  account will be charged with benefits paid following the filing of
42  a valid new claim and a determination by the examiner based on
43  all information relating to the claim contained in the records of
HB 2121--Am.
                                     

 1  the division of employment. Such notice shall become final and
 2  benefits charged to the base period employer's account in accor-
 3  dance with the claim unless within 10 calendar days from the date
 4  the notice was mailed, the base period employer requests in writ-
 5  ing that the examiner reconsider the determination and furnishes
 6  any required information in accordance with the secretary's rules
 7  and regulations. In a similar manner, a notice of an additional
 8  claim followed by the first payment of benefits with respect to the
 9  benefit year, filed by an individual during a benefit year after a
10  period in such year during which such individual was employed,
11  shall be given to any base period employer of the individual who
12  has requested such a notice within 10 calendar days from the date
13  the notice of the valid new claim was mailed to such base period
14  employer. For purposes of this subsection (c)(3), if the required
15  information is not submitted or postmarked within a response time
16  limit of 10 days after the mailing date of the base period employer
17  notice, the base period employer shall be deemed to have waived
18  its standing as a party to the proceedings arising from the claim
19  and shall be barred from protesting any subsequent decisions
20  about the claim by the secretary, a referee, the board of review or
21  any court, except that the base period employer's response time
22  limit may be waived or extended by the examiner or upon appeal,
23  if timely response was impossible due to excusable neglect. The
24  examiner shall notify the employer of the reconsidered determi-
25  nation which shall be subject to appeal, or further reconsideration,
26  in accordance with the provisions of K.S.A. 44-709 and amend-
27  ments thereto.
28    (4)  Time, computation and extension. In computing the period of
29  time for a base period employer response or appeals under this
30  section from the examiner's or the special examiner's determina-
31  tion or from the referee's decision, the day of the act, event or
32  default from which the designated period of time begins to run
33  shall not be included. The last day of the period shall be included
34  unless it is a Saturday, Sunday or legal holiday, in which event the
35  period runs until the end of the next day which is not a Saturday,
36  Sunday or legal holiday.
37    (d)  Pooled fund. All contributions and payments in lieu of con-
38  tributions and benefit cost payments to the employment security
39  fund shall be pooled and available to pay benefits to any individual
40  entitled thereto under the employment security law, regardless of
41  the source of such contributions or payments in lieu of contribu-
42  tions or benefit cost payments.
43    (e)  Election to become reimbursing employer; payment in lieu of con-
HB 2121--Am.
                                     

 1  tributions. (1) Any governmental entity for which services are per-
 2  formed as described in subsection (i)(3)(E) of K.S.A. 44-703 and
 3  amendments thereto or any nonprofit organization or group of
 4  nonprofit organizations described in section 501(c)(3) of the fed-
 5  eral internal revenue code of 1986 which is exempt from income
 6  tax under section 501(a) of such code, that becomes subject to the
 7  employment security law may elect to become a reimbursing em-
 8  ployer under this subsection (e)(1) and agree to pay the secretary
 9  for the employment security fund an amount equal to the amount
10  of regular benefits and 1/2 of the extended benefits paid that are
11  attributable to service in the employ of such reimbursing em-
12  ployer, except that each reimbursing governmental employer shall
13  pay an amount equal to the amount of regular benefits and ex-
14  tended benefits paid for weeks of unemployment beginning after
15  December 31, 1978, to individuals for weeks of unemployment
16  which begin during the effective period of such election.
17    (A)  Any employer identified in this subsection (e)(1) may elect
18  to become a reimbursing employer for a period encompassing not
19  less than four complete calendar years if such employer files with
20  the secretary a written notice of such election within the thirty-
21  day period immediately following January 1 of any calendar year
22  or within the thirty-day period immediately following the date on
23  which a determination of subjectivity to the employment security
24  law is issued, whichever occurs later.
25    (B)  Any employer which makes an election to become a reim-
26  bursing employer in accordance with subparagraph (A) of this sub-
27  section (e)(1) will continue to be liable for payments in lieu of con-
28  tributions until such employer files with the secretary a written
29  notice terminating its election not later than 30 days prior to the
30  beginning of the calendar year for which such termination shall
31  first be effective.
32    (C)  Any employer identified in this subsection (e)(1) which has
33  remained a contributing employer and has been paying contri-
34  butions under the employment security law for a period subse-
35  quent to January 1, 1972, may change to a reimbursing employer
36  by filing with the secretary not later than 30 days prior to the
37  beginning of any calendar year a written notice of election to be-
38  come a reimbursing employer. Such election shall not be termi-
39  nable by the employer for four complete calendar years.
40    (D)  The secretary may for good cause extend the period within
41  which a notice of election, or a notice of termination, must be filed
42  and may permit an election to be retroactive but not any earlier
43  than with respect to benefits paid after January 1 of the year such
HB 2121--Am.
                                     

 1  election is received.
 2    (E)  The secretary, in accordance with such rules and regula-
 3  tions as the secretary may adopt, shall notify each employer iden-
 4  tified in subsection (e)(1) of any determination which the secretary
 5  may make of its status as an employer and of the effective date of
 6  any election which it makes to become a reimbursing employer
 7  and of any termination of such election. Such determinations shall
 8  be subject to reconsideration, appeal and review in accordance
 9  with the provisions of K.S.A. 44-710b and amendments thereto.
10    (2)  Reimbursement reports and payments. Payments in lieu of con-
11  tributions shall be made in accordance with the provisions of par-
12  agraph (A) of this subsection (e)(2) by all reimbursing employers
13  except the state of Kansas. Each reimbursing employer shall report
14  total wages paid during each calendar quarter by filing quarterly
15  wage reports with the secretary which shall become due on or before
16  the 25th day of the first month following the last month of the calendar
17  quarter or in accordance with such rules and regulations as the secretary
18  may adopt. be filed by the last day of the month following the close of
19  each calendar quarter. Wage reports are deemed filed as of the date they
20  are placed in the United States mail.
21    (A)  At the end of each calendar quarter, or at the end of any
22  other period as determined by the secretary, the secretary shall
23  bill each reimbursing employer, except the state of Kansas, (i) an
24  amount to be paid which is equal to the full amount of regular
25  benefits plus 1/2 of the amount of extended benefits paid during
26  such quarter or other prescribed period that is attributable to serv-
27  ice in the employ of such reimbursing employer; and (ii) for weeks
28  of unemployment beginning after December 31, 1978, each re-
29  imbursing governmental employer shall be certified an amount to
30  be paid which is equal to the full amount of regular benefits and
31  extended benefits paid during such quarter or other prescribed
32  period that is attributable to service in the employ of such reim-
33  bursing governmental employer.
34    (B)  Payment of any bill rendered under paragraph (A) of this
35  subsection (e)(2) shall be made not later than 30 days after such
36  bill was mailed to the last known address of the reimbursing em-
37  ployer, or otherwise was delivered to such reimbursing employer,
38  unless there has been an application for review and redetermi-
39  nation in accordance with paragraph (D) of this subsection (e)(2).
40    (C)  Payments made by any reimbursing employer under the
41  provisions of this subsection (e)(2) shall not be deducted or de-
42  ductible, in whole or in part, from the remuneration of individuals
43  in the employ of such employer.
HB 2121--Am.
                                     

 1    (D)  The amount due specified in any bill from the secretary
 2  shall be conclusive on the reimbursing employer, unless, not later
 3  than 15 days after the bill was mailed to the last known address of
 4  such employer, or was otherwise delivered to such employer, the
 5  reimbursing employer files an application for redetermination in
 6  accordance with K.S.A. 44-710b and amendments thereto.
 7    (E)  Past due payments of amounts certified by the secretary
 8  under this section shall be subject to the same interest, penalties
 9  and actions required by K.S.A. 44-717 and amendments thereto.
10  If any reimbursing employer is delinquent in making payments of
11  amounts certified by the secretary under this section, the secretary
12  may terminate such employer's election to make payments in lieu
13  of contributions as of the beginning of the next calendar year and
14  such termination shall be effective for such next calendar year and
15  the calendar year thereafter so that the termination is effective for
16  two complete calendar years.
17    (F)  In the discretion of the secretary, any employer who elects
18  to become liable for payments in lieu of contributions and any
19  reimbursing employer who is delinquent in filing reports or in
20  making payments of amounts certified by the secretary under this
21  section shall be required within 60 days after the effective date of
22  such election, in the case of an eligible employer so electing, or
23  after the date of notification to the delinquent employer under this
24  subsection (e)(2)(F), in the case of a delinquent employer, to exe-
25  cute and file with the secretary a surety bond, except that the em-
26  ployer may elect, in lieu of a surety bond, to deposit with the sec-
27  retary money or securities as approved by the secretary. The
28  amount of the bond or deposit required by this subsection (e)(2)(F)
29  shall not exceed 5.4% of the organization's taxable wages paid for
30  employment by the eligible employer during the four calendar
31  quarters immediately preceding the effective date of the election
32  or the date of notification, in the case of a delinquent employer.
33  If the employer did not pay wages in each of such four calendar
34  quarters, the amount of the bond or deposit shall be as determined
35  by the secretary. Upon the failure of an employer to comply with
36  this subsection (e)(2)(F) within the time limits imposed or to main-
37  tain the required bond or deposit, the secretary may terminate the
38  election of such eligible employer or delinquent employer, as the
39  case may be, to make payments in lieu of contributions, and such
40  termination shall be effective for the current and next calendar
41  year.
42    (G)  The state of Kansas shall make reimbursement payments
43  quarterly at a fiscal year rate which shall be based upon: (i) The
HB 2121--Am.
                                     

 1  available balance in the state's reimbursing account as of Decem-
 2  ber 31 of each calendar year; (ii) the historical unemployment ex-
 3  perience of all covered state agencies during prior years; (iii) the
 4  estimate of total covered wages to be paid during the ensuing cal-
 5  endar year; (iv) the applicable fiscal year rate of the claims proc-
 6  essing and auditing fee under K.S.A. 75-3798 and amendments
 7  thereto; and (v) actuarial and other information furnished to the
 8  secretary by the secretary of administration. In accordance with
 9  K.S.A. 75-3798 and amendments thereto, the claims processing
10  and auditing fees charged to state agencies shall be deducted from
11  the amounts collected for the reimbursement payments under this
12  paragraph (G) prior to making the quarterly reimbursement pay-
13  ments for the state of Kansas. The fiscal year rate shall be ex-
14  pressed as a percentage of covered total wages and shall be the
15  same for all covered state agencies. The fiscal year rate for each
16  fiscal year will be certified in writing by the secretary to the sec-
17  retary of administration on July 15 of each year and such certified
18  rate shall become effective on the July 1 immediately following the
19  date of certification. A detailed listing of benefit charges applica-
20  ble to the state's reimbursing account shall be furnished quarterly
21  by the secretary to the secretary of administration and the total
22  amount of charges deducted from previous reimbursing payments
23  made by the state. On January 1 of each year, if it is determined
24  that benefit charges exceed the amount of prior reimbursing pay-
25  ments, an upward adjustment shall be made therefor in the fiscal
26  year rate which will be certified on the ensuing July 15. If total
27  payments exceed benefit charges, all or part of the excess may be
28  refunded, at the discretion of the secretary, from the fund or re-
29  tained in the fund as part of the payments which may be required
30  for the next fiscal year.
31    (3)  Allocation of benefit costs. The reimbursing account of each
32  reimbursing employer shall be charged the full amount of regular
33  benefits and 1/2 of the amount of extended benefits paid except
34  that each reimbursing governmental employer's account shall be
35  charged the full amount of regular benefits and extended benefits
36  paid for weeks of unemployment beginning after December 31,
37  1978, to individuals whose entire base period wage credits are
38  from such employer. When benefits received by an individual are
39  based upon base period wage credits from more than one em-
40  ployer then the reimbursing employer's or reimbursing govern-
41  mental employer's account shall be charged in the same ratio as
42  base period wage credits from such employer bear to the indivi-
43  dual's total base period wage credits. Notwithstanding any other
HB 2121--Am.
                                     

 1  provision of the employment security law, no reimbursing em-
 2  ployer's or reimbursing governmental employer's account shall be
 3  charged for payments of extended benefits which are wholly re-
 4  imbursed to the state by the federal government.
 5    (A)  Proportionate allocation (when fewer than all reimbursing base
 6  period employers are liable). If benefits paid to an individual are
 7  based on wages paid by one or more reimbursing employers and
 8  on wages paid by one or more contributing employers or rated
 9  governmental employers, the amount of benefits payable by each
10  reimbursing employer shall be an amount which bears the same
11  ratio to the total benefits paid to the individual as the total base
12  period wages paid to the individual by such employer bears to the
13  total base period wages paid to the individual by all of such indi-
14  vidual's base period employers.
15    (B)  Proportionate allocation (when all base period employers are re-
16  imbursing employers). If benefits paid to an individual are based on
17  wages paid by two or more reimbursing employers, the amount of
18  benefits payable by each such employer shall be an amount which
19  bears the same ratio to the total benefits paid to the individual as
20  the total base period wages paid to the individual by such employer
21  bear to the total base period wages paid to the individual by all of
22  such individual's base period employers.
23    (4)  Group accounts. Two or more reimbursing employers may
24  file a joint application to the secretary for the establishment of a
25  group account for the purpose of sharing the cost of benefits paid
26  that are attributable to service in the employment of such reim-
27  bursing employers. Each such application shall identify and au-
28  thorize a group representative to act as the group's agent for the
29  purposes of this subsection (e)(4). Upon approval of the applica-
30  tion, the secretary shall establish a group account for such em-
31  ployers effective as of the beginning of the calendar quarter in
32  which the secretary receives the application and shall notify the
33  group's representative of the effective date of the account. Such
34  account shall remain in effect for not less than four years and
35  thereafter such account shall remain in effect until terminated at
36  the discretion of the secretary or upon application by the group.
37  Upon establishment of the account, each member of the group
38  shall be liable for payments in lieu of contributions with respect
39  to each calendar quarter in the amount that bears the same ratio
40  to the total benefits paid in such quarter that are attributable to
41  service performed in the employ of all members of the group as
42  the total wages paid for service in employment by such member
43  in such quarter bear to the total wages paid during such quarter
HB 2121--Am.
                                     

 1  for service performed in the employ of all members of the group.
 2  The secretary shall adopt such rules and regulations as the secre-
 3  tary deems necessary with respect to applications for establish-
 4  ment, maintenance and termination of group accounts that are
 5  authorized by this subsection (e)(4), for addition of new members
 6  to, and withdrawal of active members from such accounts, and for
 7  the determination of the amounts that are payable under this sub-
 8  section (e)(4) by members of the group and the time and manner
 9  of such payments.
10    Sec. 2. 3.  K.S.A. 1996 Supp. 44-710 and 44-717 is are hereby re-
11  pealed.
12    Sec. 3. 4.  This act shall take effect and be in force from and after its
13  publication in the statute book.