HB 5 — Unemployment Insurance Technical Changes.

The Division must furnish an employer with a statement of all credits and charges made to its account as of the computation date prior to January 1 of the succeeding year.

The Division may, in its sole discretion, provide a reimbursing employer with informational bills or lists of charges on a basis more frequent than yearly if the Division finds it is in the best interest of the Division and the affected employer to do so.

(e) Annual Reconciliation.

– A reimbursing employer must maintain an account balance equal to one percent (1%) of its taxable wages.

The Division must determine the balance of each employer's account on the computation date.

If there is a deficit in the account, the Division must bill the employer for the amount necessary to bring its account to one percent (1%) of its taxable wages for the immediate four quarters preceding July 1.

Any Except as provided in subsection (j) of this section, any amount in the account in excess of the one percent (1%) of taxable wages will be retained in the employer's account as a credit and will not be refunded to the employer.

The Page 4 House Bill 5*-Second Edition General Assembly Of North Carolina Session 2017 Division must send a bill as soon as practical.

Payment is due within 30 days from the date a bill is mailed.

Amounts unpaid by the due date accrue interest and penalties in the same manner as past-due contributions and are subject to the same collection remedies provided under G.S.

96-10 for past-due contributions.

(f) Quarterly Wage Reports.

– A reimbursing employer must submit quarterly wage reports to the Division on or before the last day of the month following the close of the calendar quarter in which the wages are paid.

During the first four quarters following an election to be a reimbursing employer, the employer must submit an advance payment with its quarterly report.

The amount of the advance payment is equal to one percent (1%) of the taxable wages reported on the quarterly wage report.

The Division must remit the payments to the Unemployment Insurance Fund and credit the payments to the employer's account.

(g) Change in Election.

– The Division must close the account of an employer that has been paying contributions under G.S.

96-9.2 and that elects to change to a reimbursement basis under this section.

A closed account may not be used in any future computation of a contribution rate.

The Division must close the account of an employer that terminates its election to reimburse the Unemployment Insurance Fund in lieu of making contributions.

An employer that terminates its election under this section is subject to the standard beginning rate.

(h) Noncompliance by Indian Tribes.

– An Indian tribe that makes an election under this section and then fails to comply with this section is subject to the following consequences:

(1) An employer that fails to pay an amount due within 90 days after receiving a bill and has not paid this liability as of the computation date loses the option to make reimbursable payments in lieu of contributions for the following calendar year.

An employer that loses the option to make reimbursable payments in lieu of contributions for a calendar year regains that option for the following calendar year if it pays its outstanding liability and makes all contributions during the year for which the option was lost.

(2) Services performed for an employer that fails to make payments, including interest and penalties, required under this section after all collection activities considered necessary by the Division have been exhausted, are no longer treated as "employment" for the purpose of coverage under this Chapter.

An employer that has lost coverage regains coverage under this Chapter for services performed if the Division determines that all contributions, payments in lieu of contributions, penalties, and interest have been paid.

The Division must notify the Internal Revenue Service and the United States Department of Labor of any termination or reinstatement of coverage pursuant to this subsection.

(i) Expired January 1, 2016.

(j) Refund.

– If a reimbursing employer erroneously remits an amount in excess of the amount due, the employer may apply to the Division for a refund of the excess amount remitted within the time limits in this subsection.

The Division must determine that the requested refund was in excess of the amount due and was erroneously paid.

The Division must refund, without interest, the excess amount but in no event will the refund result in an account balance less than one percent (1%) of the reimbursing employer's taxable wages.

The refund application must be filed by the later of the following:

(1) Five years from the last day of the calendar year with respect to which a payment was made.

(2) One year from the date on which such payment was made." PART IV.

House Bill 5*-Second Edition Page 5 General Assembly Of North Carolina Session 2017 (a) Mandatory Transfer.

– If an employer transfers its business, or a portion thereof, to another person and, at the time of the transfer, there is substantially common ownership, management, or control of the predecessor employer and the transferee, then the Page 4 House Bill 5*-First Edition General Assembly Of North Carolina Session 2017 portion of the account attributable to the transferred business must be transferred to the transferee as of the date of the transfertransfer. for use in the determination of the transferee's contribution rate.

Continuity of control Substantially common ownership, management, or control exists if one or more persons, entities, or other organizations owning, managing, or controlling the business enterprise remain in maintain substantial ownership, management, or control of the new employer.

Control may occur by means of ownership of the organization conducting the business enterprise, business, ownership of assets necessary to conduct the business enterprise, business, security arrangements or lease arrangements covering assets necessary to conduct the business Page 6 House Bill 5*-Second Edition General Assembly Of North Carolina Session 2017 enterprise, business, or a contract when the ownership, stated arrangements, or contract provide for or allow direction of the internal affairs or conduct of the business enterprise.

– The account of the predecessor employer will not be transferred if the Division finds that a person formed or acquired the business solely or primarily for the purpose of obtaining a lower contribution rate.

– Notwithstanding the other provisions in this section, when an account is transferred in its entirety to a successor employer, the transferring employer's contribution rate is the standard beginning rate.If the effective date of a transfer of an account under this section is after the computation date in a calendar year, the Division must recalculate the contribution rate for the predecessortransferring employer and the successortransferee employer based on their account balances on the effective date of the account transfer.

– Any transferee subjectwith tosubstantially acommon completeownership, transfermanagement, ofor accountcontrol underof thisan sectionexisting business must not request or maintain an account with the Division other than the account of the existing business.

If a transferee receives a new account and the Division subsequently finds that thesuch transfereenew isemployer subjecthas tosubstantially acommon completeownership, transfermanagement, ofor accountcontrol underwith thisan section,existing business, the Division must House Bill 5*-First Edition Page 5 General Assembly Of North Carolina Session 2017 recalculate the annual tax rates based on the combined annual account balances of the new employer and the existing business." SECTION 4.(b) This section becomes effective July 1, 2017.

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