SB2034

Report Title:

Unemployment Insurance Law; Treatment of Indian Tribes

Description:

Conforms the unemployment insurance law to FUTA by requiring unemployment insurance coverage of Indian tribes and by extending to Indian tribes the same option afforded to state and local governments to pay contributions or reimburse UI costs.

THE SENATE	S.B. NO.	2034
TWENTY-THIRD LEGISLATURE, 2006
STATE OF HAWAII

A BILL FOR AN ACT

relating to employment security law.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 383, Hawaii Revised Statutes, is amended by adding a new section to part III to be appropriately designated and to read as follows:

"§383- Treatment of Indian tribes. (a) As used in this section:

"Employer" includes any Indian tribe for which service in employment as defined in this section is performed.

"Employment" means service performed in the employ of an Indian tribe, as defined by section 3306(u) of the Federal Unemployment Tax Act; provided that the service is excluded from "employment" as defined in the Federal Unemployment Tax Act solely by reason of section 3306(c)(7) of the Federal Unemployment Tax Act and is not otherwise excluded from "employment" under this chapter. For purposes of this section, the exclusions from employment under section 383-7 apply to service performed in the employ of an Indian tribe in the same manner as the exclusions apply to government and nonprofit entities.

"Indian tribe" has the same meaning given the term by section 4(e) of the Indian Self-Determination and Education Assistance Act, 25 U.S.C. section 450b(e), and includes any subdivision, subsidiary, or business enterprise wholly owned by an Indian tribe.

(b) Benefits based on service in employment as defined in this section shall be payable in the same amount, on the same terms and subject to the same conditions, as benefits payable on the basis of other service subject to this chapter. The financing of benefits shall apply in the same manner and under the same terms and conditions as section 383-62 for nonprofit organizations subject to this chapter, except that the provisions of this section shall apply where there is a conflict.

(1) Effective January 1, 2006, an Indian tribe subject to this chapter shall pay contributions under the provisions of this part, except for payments pursuant to section 383-62(b), applicable to other employers unless the Indian tribe elects to pay to the director of labor and industrial relations for the fund an amount equal to the amount of benefits attributable to service in the employ of an Indian tribe;

(2) An Indian tribe electing to make payments in lieu of contributions shall make this election in the same manner and under the same conditions as provided in section 383-62(d)(1). An Indian tribe shall determine if reimbursement for benefits paid will be elected by the tribe as a whole, by individual tribal units, or by combinations of individual tribal units;

(3) An Indian tribe shall be billed and shall make payments made in accordance with section 383-62(d)(2) for the full amount of benefits attributable to service in the employ of the Indian tribe on the same schedule as nonprofit organizations that have elected to make reimbursement payments in lieu of contributions; and

(4) An Indian tribe that elects to become liable for payments of contributions shall be required, within thirty days after the effective date of its election, to deposit with the department an amount of money as security as determined under section 383-62(d)(3).

(c) An Indian tribe that fails to make the payments required under this chapter is subject to this subsection as follows:

(1) An Indian tribe that fails to make the payments required under this chapter, within ninety days after a bill was mailed to its last known address or was otherwise delivered to it, shall lose the option to make payments in lieu of contributions throughout the next four consecutive calendar quarters, beginning with the quarter in which the loss of option becomes effective;

(2) An Indian tribe that loses the option to make payments in lieu of contributions due to late payment or nonpayment shall have the option reinstated after a period of one year if all contributions have been timely made and no contributions, payments in lieu of contributions for benefits paid, security deposit and penalties, or interest remain outstanding; and

(3) If an Indian tribe fails to make payments required under this chapter, including assessments of interest and penalty, within ninety days of a final notice of delinquency, the department shall immediately notify the United States Internal Revenue Service and the United States Department of Labor.

(d) Notices of payment and reporting delinquency to Indian tribes shall include information that failure to make full payments within the prescribed time shall cause the Indian tribe to:

(1) Be liable for taxes under the Federal Unemployment Tax Act; and

(2) Lose the option to make payments in lieu of contributions.

(e) The amount payable to the fund by each Indian tribe that is liable for payments in lieu of contributions shall be determined in the same manner as provided in section 383-62(e).

(f) An Indian tribe shall reimburse the fund for all extended benefits paid that are attributable to service in the employ of the Indian tribe unless the benefits are reimbursed by the federal government.

(g) Any two or more Indian tribes 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 those employers in the same manner as provided in section 383-62(f)."

SECTION 2. Constitutional material to be repealed is bracketed and stricken. New constitutional material is underscored.

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________