No. 29689 (Repeal and Reenact): R994-308. Bond or Security Requirement

DAR File No.: 29689
Filed: 03/15/2007, 04:28
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

This proposed repeal and reenactment is to ensure the rule accurately reflects current law and practice.

Summary of the rule or change:

These changes are being made as part of the Department's effort to rewrite all of its rules. This rule was changed to more accurately reflect current practice and state and federal law. Archaic language has been removed and additional explanations and clarifying language have been added throughout. Federal definitions have been added to assist the industry in determining coverage. There were so many, mostly minor changes that the underlining and strikeout method of amending the rule made it too difficult to read and understand. For that reason, the Department determined to repeal and reenact the rule. The current rule and this proposed new rule are essentially equivalent in substance.

State statutory or constitutional authorization for this rule:

Section 35A-1-104, and Subsections 35A-1-104(4) and 35A-4-502(1)(b)

Anticipated cost or savings to:

the state budget:

This is a federally-funded program so there are no costs or savings to the state budget.

local governments:

This is a federally-funded program so there are no costs or savings to local government.

other persons:

There are no costs or savings to any other persons as there are no fees associated with this program and it is federally funded.

Compliance costs for affected persons:

There are no costs or savings to any affected persons as there are no fees associated with this program and it is federally funded. These changes will not impact any employer's contribution rate.

Comments by the department head on the fiscal impact the rule may have on businesses:

There are no compliance costs associated with this change. There are no fees associated with this change. There will be no cost to anyone to comply with these changes. There will be no fiscal impact on any business. These changes will have no impact on any employer's contribution tax rate. Tani Downing, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Workforce Services
Unemployment Insurance
140 E 300 S
SALT LAKE CITY UT 84111-2333

Direct questions regarding this rule to:

Suzan Pixton at the above address, by phone at 801-526-9645, by FAX at 801-526-9211, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

05/01/2007

This rule may become effective on:

05/09/2007

Authorized by:

Tani Downing, Executive Director

RULE TEXT

R994. Workforce Services, Unemployment Insurance.

[R994-308. Bond or Security Requirement.

R994-308-101. General Definition.

To ensure compliance with the contribution provisions of the Act, the Department may require an employer to provide a bond or other security deposit under Section 35A-4-308(1). This rule describes the types of deposits, the conditions under which a deposit may be required, how the amount of the deposit is determined and the disposition of the deposit.

 

R994-308-102. Types of Deposits.

A cash deposit will generally be required; however, at the Department's discretion other forms of security may be accepted.

 

R994-308-103. Reasons for Requiring a Deposit.

(1) A security deposit may be required whenever circumstances would reasonably cause doubt as to an employer's future compliance with the contribution provisions of the Act. Failure to comply includes such things as failing to file reports, pay contributions, file a wage list or comply with other requests made by the Department. Some of the more common reasons for requiring a deposit are the following:

(a) the employer's past failure to comply;

(b) the employer is an out-of-state employer and has workers in Utah;

(c) the employer is in an industry where the rate of past failure to comply is high;

(d) the employer's or principal's past failure to comply in other businesses with which he is or has been affiliated; and

(e) the employer is a leasing employer or temporary services employer and the potential for a negative impact on the trust fund is greater due to the fact that the responsibility for the payment of contributions rests with one employer rather than all the employer's clients.

 

R994-308-104. Amount of Deposit.

When a cash deposit is required, such deposit shall be a minimum of $100 and shall not exceed an amount equal to three times the quarterly contribution liability currently accruing or expected to accrue.

 

R994-308-105. Disposition of Deposit.

If after the employer makes the required deposit he fails to comply with the Act, the Department will use the cash deposit or the proceeds from the sale of the bond or security to pay contributions, interest and penalties due as defined by Subsection R994-302-103(4). The Department may then require a new deposit.

 

R994-308-106. Interest Earned on Cash Deposits.

Interest earned on cash deposits will be paid into the same fund as other interest and penalties collected by the Department as provided by Subsection 35A-4-305(1)(e).]

R994-308. Bond Requirement.

R994-308-101. Authority to Require a Bond.

To ensure compliance with the contribution provisions of the Act, the Department may require an employer to provide a bond or other security deposit under Subsection 35A-4-308(1).

 

R994-308-102. Types of Deposits.

A cash deposit will generally be required, however, at the Department's discretion, other forms of security may be accepted.

 

R994-308-103. Reasons for Requiring a Deposit.

(1) A deposit may be required whenever circumstances would reasonably cause doubt as to an employer's future compliance with the provisions of the Act. Failure to comply includes such things as failing to file reports, pay amounts due, file a wage list or comply with other requests made by the Department. Some of the more common reasons for requiring a deposit are;

(a) the employer's past failure to comply,

(b) the employer is an out-of-state employer and has workers in Utah,

(c) the employer is in an industry where the rate of past failure to comply is high, or

(d) the employer's or principal's past failure to comply in other businesses with which the employer or principal is or has been affiliated.

 

R994-308-104. Amount of Deposit.

(1) When a deposit is required from a contributory employer, the deposit shall be the greater of $1000 or three times the quarterly contribution liability currently accruing or expected to accrue.

(2) When a deposit is required from a reimbursable governmental or Indian tribal employer, the deposit shall be the greater of $1000 or nine times the monthly benefit charges currently accruing or expected to accrue.

 

R994-308-105. Disposition of Deposit.

If the employer fails to comply with the Act after making the required deposit, the Department will use the deposit to pay amounts due as defined by Subsection R994-302-103(4). The Department may then require a new deposit.

 

R994-308-106. Interest Earned on Deposits.

Interest earned on cash deposits will be paid into the same fund as other interest and penalties collected by the Department as provided by Subsection 35A-4-305(1)(e).

 

KEY: unemployment compensation, bonding requirements

Date of Enactment or Last Substantive Amendment: [1991]2007

Notice of Continuation: May 9, 2006

Authorizing, and Implemented or Interpreted Law: 35A-4-308(1)