SB1205 - 532R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 23-750, Arizona Revised Statutes, is amended to read:

START_STATUTE23-750. Special provisions for nonprofit organizations and state and local governments

A. The provisions of This section apply applies to:

1. Any nonprofit organization described in section 23-617, paragraph 10 of section 23‑617, which that but for the provisions of section 23‑613, subsection A, paragraph 2, subdivision (c) would not be subject to this chapter, or which that is not mandatorily subject to this chapter because of insufficient employees but which that has voluntarily elected to become subject to this chapter.

2. This state, or a political subdivision thereof of this state, or any instrumentality, agency or board of any one or more of the foregoing or any instrumentality of any of the foregoing and one or more other states or political subdivisions.

B. Benefits paid to employees of employing units to which this section applies shall be financed in accordance with the provisions of pursuant to this subsection. as follows:

1. Any employing unit to which this section applies:

(a) Which That is or becomes subject to this chapter on January 1, 1972, may elect to become liable for payments in lieu of contributions for a period of not less than at least three consecutive taxable years beginning with January 1, 1972, provided it files with the department a written notice of its election not later than sixty days after written notice that such the election may be made is first given to the employing unit by the department.

(b) Which That becomes subject to this chapter after January 1, 1972, may elect to become liable for payments in lieu of contributions for a period of not less than at least three consecutive taxable years by filing a written notice of its election with the department not later than thirty days immediately following the date of the determination of such subjectivity that the employing unit is subject to this chapter.

(c) Which That makes an election in accordance with subdivision (a) or (b) of this paragraph shall continue to be liable for payments in lieu of contributions until it files with the department a written notice terminating its election not later than thirty days prior to before the beginning of the taxable year for which such termination shall first be effective.

(d) Which That has been paying contributions under this chapter subsequent to after January 1, 1972, for a period of not less than at least three consecutive taxable years may elect to become liable for payments in lieu of contributions for a period of not less than at least three consecutive taxable years by filing a written notice of its election with the department not later than thirty days prior to before the beginning of the taxable year for which such the election shall first be effective.

2. The department may for good cause extend the period within which a notice of election or a notice of termination must be filed.

3. The department shall notify the employing unit of any determination made of its status as an employer and of the effective date of any election or termination of such an election made in accordance with this subsection. Such The determination shall be subject to reconsideration, petition for hearing, and judicial review in accordance with the provisions of section 23‑724.

4. An employing unit shall pay to the department for the fund an amount equal to the amount of regular benefits and of one‑half of the extended benefits paid which that were based upon on wages paid during the employing unit's period of election to make payments in lieu of contributions, except that a governmental entity shall pay to the department for the fund an amount equal to the total amount of extended benefits paid for weeks of unemployment beginning on or after January 1, 1979, which that are based upon on wages paid by the governmental entity during its election to make payments in lieu of contributions. The provisions of Sections 23‑727, 23‑773 and 23‑777, insofar as they apply to noncharging an employer's account for benefit payments, do not apply to benefits paid which that were based upon on wages paid during the employing unit's period of election to make payments in lieu of contributions.

C. As soon as practicable after the end of each calendar quarter the department shall determine the amount of payments in lieu of contributions due from each employing unit and shall bill each employing unit for the amount due. If payment is not made on or before the date due and payable as prescribed by the department, the whole or part thereafter remaining unpaid shall bear interest at the rate of one per cent percent per month or fraction thereof, from and after the due date until payment is received by the department. The amount of payments due hereunder but not paid may be collected by the department, together with interest and penalties, if any, in the same manner and subject to the same conditions as contributions due from other employers. The amount due specified in any bill from the department shall be conclusive and binding on the employing unit unless not later than fifteen days after the bill was mailed to its last known address, the employing unit files an application for redetermination. A redetermination made under this subsection shall be subject to petition for hearing and judicial review in accordance with the provisions of section 23‑724.

D. Two or more employing units that have become liable for payments in lieu of contributions may file a joint application to the department for the establishment of a group account for the purpose of sharing the cost of benefits paid that are attributable to service in the employ of such the employing units. Each application shall identify and authorize a group representative to act as the group's agent for the purposes of this subsection. Upon On approval of the application, the department shall establish a group account for such the employing units effective as of the beginning of the calendar quarter in which the application is received and shall notify the group's representative of the effective date of the account. The account shall remain in effect for not less than at least three years and thereafter until terminated at the discretion of the department or upon on application by the group. Upon On establishment of the account, each member of the group shall be liable for payments in lieu of contributions with respect to each calendar quarter in the amount that bears the same ratio to the total benefits paid in such that quarter that are attributable to service performed in the employ of all members of the group as the total wages paid for service in employment by such the member in such that quarter bear to the total wages paid during such quarter for service performed in the employ of all members of the group. The department shall prescribe such regulations as it deems necessary with respect to applications for establishment, maintenance, and termination of group accounts that are authorized by this subsection, for addition of new members to, and withdrawal of active members from, such accounts, and for the determination of the amounts that are payable under this subsection by members of the group and the time and manner of such payments.

E. Benefits are payable on the basis of employment to which this section applies, in the same amount, on the same terms, and subject to the same conditions as benefits payable on the basis of other employment subject to this chapter, except that notwithstanding the provisions of sections 23‑779 and 23‑780:

1. Benefits based on service in an instructional, research, or principal administrative capacity for an educational institution shall not be paid to an individual for any week of unemployment which that begins during the period between two successive academic years, or during a similar period between two regular terms, whether or not successive, or during a period of paid sabbatical leave provided for in the individual's contract, if the individual performs such the services in the first of such the academic years or terms and if there is a contract or a reasonable assurance that such the individual will perform services in any such capacity for any educational institution in the second of such the academic years or terms.

2. Benefits based on service in any other capacity for an educational institution shall not be paid to an individual for any week of unemployment which that begins during a period between two successive academic years or terms if the individual performs such the services in the first of such academic years or terms and if there is a reasonable assurance that such the individual will perform such the services in the second of such the academic years or terms, except that if benefits are denied to any individual under this paragraph and that individual was not offered an opportunity to perform such the services for the educational institution for the second of such the academic years or terms, the individual is entitled to a retroactive payment of benefits for each week for which the individual filed a timely claim for benefits and for which benefits were denied solely by reason of this paragraph.

3. Benefits based on services described in paragraph 1 or 2 of this subsection shall not be paid to an individual for any week of unemployment which that begins during an established and customary vacation period or holiday recess if the individual performs such services in the period immediately before such the vacation period or holiday recess and if there is a reasonable assurance that such the individual will perform such the services in the period immediately following such vacation period or holiday recess.

4. With respect to any services described in paragraph 1 or 2 of this subsection, benefits are not payable on the basis of services in any capacity specified in paragraph 1, 2 or 3 of this subsection to any individual who performed such these services in an educational institution while in the employ of an educational service agency. For the purposes of this paragraph, "educational service agency" means a governmental agency or governmental entity which that is established and operated exclusively for the purpose of providing such these services to one or more educational institutions.

5. With respect to services described in paragraph 1, 2 or 3 of this subsection, benefits are not payable on the basis of services specified in paragraph 1, 2 or 3 of this subsection to any individual who performed these services while in the employ of an entity that provides these services to or on behalf of an educational institution.

6. If an individual provides services to more than one educational employer described in paragraph 1, 2 or 3 of this subsection, benefits are not payable on the basis of services provided to an educational employer for which there is a contract or reasonable assurance for determining eligibility for benefits between or within terms, but benefits are payable on the basis of services provided to an employer for which there is no contract or reasonable assurance.

F. In determining contribution rates assigned to employers under this chapter, the payrolls of employing units liable for payments in lieu of contributions shall not be included in computing the contribution rates to be assigned to employers under this chapter. The payments in lieu of contributions made by such these employing units shall be included in the total assets of the fund in the same manner as contributions paid by other employers.

G. Except as inconsistent with the provisions of this section, the provisions of this chapter and regulations of the department shall apply to any matter arising pursuant to this section. END_STATUTE

Sec. 2. Section 23-787, Arizona Revised Statutes, is amended to read:

START_STATUTE23-787. Repayment of and deductions for benefits obtained by claimants not entitled to benefits; collection; interest

A. A person who receives any amount as benefits under this chapter to which the person is not entitled is liable to repay the overpaid amount to the department. The department may deduct all or a portion of the overpayment from future benefits payable to the person under this chapter.

B. If benefits to which a person is not entitled are received by reason of fraud committed by the person as determined by the department, the department shall assess a penalty on the person equal to fifteen percent of the amount of the erroneous payment and the person is not eligible to receive any benefits under this chapter until the total amount of the overpayment and all penalties and interest have been recovered, waived or otherwise satisfied in compliance with a civil judgment. For the purposes of this section only, any interest on a fraud overpayment that has been waived under subsection G of this section shall be treated as though it was recovered. Fraud overpayments and penalties may not be waived. The department shall immediately deposit all assessments paid pursuant to this subsection in the unemployment compensation fund established by section 23‑701.

C. If benefits to which a person is not entitled are received without any fault on the person's part and if repayment or deduction from future benefits would be against equity and good conscience, the department may waive all or a portion of the amount overpaid.

D. If benefits to which a person is not entitled are received without any fault on the person's part, deductions made by the department pursuant to subsection A of this section from benefits payable to an individual for any week shall not exceed twenty‑five percent of the individual's weekly benefit amount unless required by federal law, except that the amount recouped from benefits payable may be fifty percent of the weekly benefit amount if the individual has previously received benefits but has not received benefits for at least twelve consecutive months before the most recent receipt of benefits and there has been no reasonable attempt to repay the indebtedness during that period. The fifty percent recoupment rate may not be put in effect before one year after the establishment of the overpayment.

E. The department shall adopt rules to implement subsection D of this section.

F. The attorney general or the appropriate county attorney may institute appropriate court proceedings to recover in the name of the department any amount for which a person is liable to the department.

G. Interest on all benefit overpayment debts, including those reduced to judgment, shall accrue at ten percent a year. The department may waive a portion of any accrued interest on a benefit overpayment debt for good cause shown. For benefit overpayment debts classified as fraud, the amount of interest waived may not exceed twenty‑five percent.

H. The department may not collect an overpayment amount or interest amount that has been waived pursuant to subsection C or G of this section, respectively.

I. This section does not prohibit the department from accepting voluntary payments. END_STATUTE