A2081

ASSEMBLY, No. 2081

STATE OF NEW JERSEY

INTRODUCED JUNE 3, 1996

By Assemblymen WISNIEWSKI and ROBERTS

An Act to transfer from the Department of Labor to the Department of the Treasury the responsibility for collecting contributions to the unemployment compensation fund, State disability benefits fund, Workforce Development Partnership Fund and Second Injury Fund, amending R.S.43:21-14, P.L.1948, c.110, P.L.1992, c.44, and R.S.34:15-94.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. R.S.43:21-14 is amended to read as follows:

43:21-14. (a)(1) In addition to such reports as may be required under the provisions of subsection (g) of R.S.43:21-11, every employer shall file with the [controller] State Treasurer periodical contribution reports on such forms and at such times as the [controller] State Treasurer shall prescribe, to disclose the employer's liability for contributions under the provisions of this chapter (R.S.43:21-1 et seq.), and at the time of filing each contribution report shall pay the contributions required by this chapter (R.S.43:21-1 et seq.), for the period covered by such report. The [controller] State Treasurer may require that such reports shall be under oath of the employer. Any employer who shall fail to file any report, required by the [controller] State Treasurer, on or before the last day for the filing thereof shall pay a penalty of $5.00 for each day of delinquency until and including the fifth day following such last day and for any period of delinquency after such fifth day, a penalty of $5.00 a day or 20% of the amount of the contributions due and payable by the employer for the period covered by the report, whichever is the lesser; if there be no liability for contributions for the period covered by any contribution report or in the case of any report other than a contribution report, the employer or employing unit shall pay a penalty of $5.00 a day for each day of delinquency in filing or $25.00, whichever is the lesser; provided, however, that when it is shown to the satisfaction of the [controller] State Treasurer that the failure to file any such report was not the result of fraud or an intentional disregard of this chapter (R.S.43:21-1 et seq.), or the regulations promulgated hereunder, the [controller] State Treasurer, in [his] the State Treasurer's discretion, may remit or abate any unpaid penalties heretofore or hereafter imposed under this section. On or before October 1 of each year, the [controller] State Treasurer shall submit to the Commissioner of Labor a report covering the 12-month period ending on the preceding June 30, and showing the names and addresses of all employers for whom the [controller] State Treasurer remitted or abated any penalties, or ratified any remission or abatement of penalties, and the amount of such penalties with respect to each employer. Any employer who shall fail to pay the contributions due for any period, on or before the date they are required by the [controller] State Treasurer to be paid, shall pay interest on the amount thereof from such date until the date of payment thereof, at the rate of 1% a month through June 30, 1981 and at the rate of 1 1/4% a month after June 30, 1981. Upon the written request of any employer or employing unit, filed with the [controller] State Treasurer on or before the due date of any report or contribution payment, the [controller] State Treasurer, for good cause shown, may grant, in writing, an extension of time for the filing of such report or the paying of such contribution, with interest at the applicable rate; provided no such extension shall exceed 30 days and that no such extension shall postpone payment of any contribution for any period beyond the day preceding the last day for filing tax returns under Title IX of the federal Social Security Act for the year in which said period occurs.

(2)(A) For the calendar quarter commencing July 1, 1984 and each successive quarter thereafter, each employer shall file a report with the controller within 30 days after the end of each quarter in a form and manner prescribed by the controller, listing the name, social security number and wages paid to each employee and the number of base weeks (as defined in subsection (t) of R.S.43:21-19) worked by the employee during the calendar quarter.

(B) Any employer who fails without reasonable cause to comply with the reporting requirements of this paragraph (2) shall be liable for a penalty in the following amount for each employee with respect to whom the employer is required to file a report but who is not included in the report or for whom the required information is not accurately reported for each employee required to be included, whether or not the employee is included:

(i) For the first failure for one quarter in any eight consecutive quarters, $5.00 for each employee;

(ii) For the second failure for any quarter in any eight consecutive quarters, $10.00 for each employee; and

(iii) For the third failure for any quarter in any eight consecutive quarters, and for any failure in any eight consecutive quarters, which failure is subsequent to the third failure, $25.00 for each employee.

(C) Information reported by employers as requested by this paragraph (2) shall be used by the Department of Labor for the purpose of determining eligibility for benefits of individuals in accordance with the provisions of R.S.43:21-1 et seq. Notwithstanding the provisions of subsection (g) of R.S.43:21-11, the Department of Labor is hereby authorized to provide the Department of Human Services and the Higher Education Assistance Authority with information reported by employers as required by this paragraph (2). For each fiscal year, the Director of the Division of Budget and Accounting of the Department of the Treasury shall charge the appropriate account of the Department of Human Services and the Higher Education Assistance Authority in amounts sufficient to reimburse the Department of Labor for the cost of providing information under this subparagraph (C).

(D) For the purpose of administering the provisions of this paragraph (2), all appropriations, files, books, papers, records, equipment and other property, and employees currently assigned to the Division of Taxation for the implementation of the "Wage Reporting Act," P.L.1980, c.48 (C.54:1-55 et seq.), shall be transferred to the Department of Labor as of September 1, 1984 in accordance with the provisions of the "State Agency Transfer Act," P.L.1971, c.375 (C.52:14D-1 et seq.).

(b) The contributions, penalties, and interest due from any employer under the provisions of this chapter (R.S.43:21-1 et seq.), from the time they shall be due, shall be a personal debt of the employer to the State of New Jersey, recoverable in any court of competent jurisdiction in a civil action in the name of the State of New Jersey; provided, however, that except in the event of fraud, no employer shall be liable for contributions or penalties unless contribution reports have been filed or assessments have been made in accordance with subsection (c) or (d) of this section before four years have elapsed from the last day of the calendar year with respect to which any contributions become payable under this chapter (R.S.43:21-1 et seq.), nor shall any employer be required to pay interest on any such contribution unless contribution reports were filed or assessments made within such four-year period; provided further that if such contribution reports were filed or assessments made within the four-year period, no civil action shall be instituted, nor shall any certificate be issued to the Clerk of the Superior Court under subsection (e) of this section, except in the event of fraud, after six years have elapsed from the last day of the calendar year with respect to which any contributions become payable under this chapter (R.S.43:21-1 et seq.), or July 1, 1958, whichever is later. Payments received from an employer on account of any debt incurred under the provisions of this chapter (R.S.43:21-1 et seq.) may be applied by the [controller ] State Treasurer on account of the contribution liability of the employer and then to interest and penalties, and any balance remaining shall be recoverable by the [controller] State Treasurer from the employer. Upon application therefor, the [controller] State Treasurer shall furnish interested persons and entities certificates of indebtedness covering employers, employing units and others for contributions, penalties and interest, for each of which certificates the [controller] State Treasurer shall charge and collect a fee of $2.00 per name; no such certificate to be issued, however, for a fee of less than $10.00. All fees so collected shall be paid into the unemployment compensation administration fund.

(c) If any employer shall fail to make any report as required by the rules and regulations of the [division] Department of Labor or State Treasurer, as appropriate, pursuant to the provisions of this chapter (R.S.43:21-1 et seq.), the [controller] State Treasurer may make an estimate of the liability of such employer from any information [it] the department or the State Treasurer may obtain, and, according to such estimate so made, assess such employer for the contributions, penalties, and interest due the State from [him] the employer, give notice of such assessment to the employer, and make demand upon [him]the employer for payment.

(d) After a report is filed under the provisions of this chapter (R.S.43:21-1 et seq.) and the rules and regulations thereof, the controller or State Treasurer, as appropriate, shall cause the report to be examined and shall make such further audit and investigation as [it] the department or the State Treasurer may deem necessary, and if therefrom there shall be determined that there is a deficiency with respect to the payment of the contributions due from such employer, the [controller] State Treasurer shall assess the additional contributions, penalties, and interest due the State from such employer, give notice of such assessment to the employer, and make demand upon [him] the employer for payment.

(e) As an additional remedy, the [controller] State Treasurer may issue to the Clerk of the Superior Court of New Jersey a certificate stating the amount of the employer's indebtedness under this chapter (R.S.43:21-1 et seq.) and describing the liability, and thereupon the clerk shall immediately enter upon [his] the clerk's record of docketed judgments such certificate or an abstract thereof and duly index the same. Any such certificate or abstract, heretofore or hereafter docketed, from the time of docketing shall have the same force and effect as a judgment obtained in the Superior Court of New Jersey, and the [controller] State Treasurer shall have all the remedies and may take all the proceedings for the collection thereof which may be had or taken upon the recovery of such a judgment in a civil action upon contract in said court. Such debt, from the time of docketing thereof, shall be a lien on and bind the lands, tenements and hereditaments of the debtor.

The Clerk of the Superior Court shall be entitled to receive for docketing such certificate, $0.50, and for a certified transcript of such docket, $0.50. If the amount set forth in said certificate as a debt shall be modified or reversed upon review, as hereinafter provided, the Clerk of the Superior Court shall, when an order of modification or reversal is filed, enter in the margin of the docket opposite the entry of the judgment, the word "modified" or "reversed," as the case may be, and the date of such modification or reversal.

The employer, or any other party having an interest in the property upon which the debt is a lien, may deposit the amount claimed in the certificate with the Clerk of the Superior Court of New Jersey, together with an additional 10% of the amount thereof, or $100.00, whichever amount is the greater, to cover interest and the costs of court, or in lieu of depositing the amount in cash, may give a bond to the State of New Jersey in double the amount claimed in the certificate, and file the same with the Clerk of the Superior Court. Said bond shall have such surety and shall be approved in the manner required by the Rules Governing the Courts of the State of New Jersey.

After the deposit of said money or the filing of said bond, the employer, or any other party having an interest in the said property, may, after exhausting all administrative remedies, secure judicial review of the legality or validity of the indebtedness or the amount thereof, and the said deposit of cash shall be as security for, and the bond shall be conditioned to prosecute, the judicial review with effect.

Upon the deposit of said money or the filing of the said bond with the Clerk of the Superior Court, all proceedings on such judgment shall be stayed until the final determination of the cause, and the moneys so deposited shall be subject to the lien of the indebtedness and costs and interest thereon, and the lands, tenements, and hereditaments of said debtor shall forthwith be discharged from the lien of the State of New Jersey and no execution shall issue against the same by virtue of said judgment.

Notwithstanding the provisions of subsections (a) through (c) of this section, the [Department of Labor] State Treasurer may, with the concurrence of the [State Treasurer] Commissioner of Labor, when all reasonable efforts to collect amounts owed have been exhausted, or to avoid litigation, reduce any liability for contributions, penalties and interest, provided no portion of those amounts represents contributions made by an employee pursuant to subsection (d) of R.S.43:21-7.

(f) If, not later than two years after the calendar year in which any moneys were erroneously paid to or collected by the [controller] State Treasurer, whether such payments were voluntarily or involuntarily made or made under mistake of law or of fact, an employer, employing unit, or employee who has paid such moneys shall make application for an adjustment thereof, the said moneys shall, upon order of the [controller] State Treasurer, be either credited or refunded, without interest, from the appropriate fund. For like cause and within the same period, credit or refund may be so made on the initiative of the [controller] State Treasurer.

(g) All interest and penalties collected pursuant to this section shall be paid into a special fund to be known as the unemployment compensation auxiliary fund; all moneys in this special fund shall be deposited, administered and disbursed in the same manner and under the same conditions and requirements as is provided by law for other special funds in the State Treasury, and shall be expended, under legislative appropriation, for the purpose of aiding in defraying the cost of the administration of this chapter (R.S.43:21-1 et seq.); for the repayment of any interest bearing advances made from the federal unemployment account pursuant to the provisions of section 1202(b) of the Social Security Act, 42 U.S.C. §1322; and for essential and necessary expenditures in connection with programs designed to stimulate employment, as determined by the Commissioner of Labor, except that any moneys in this special fund which are not otherwise appropriated shall be applied to aiding in the defraying of necessary costs of the administration of this chapter (R.S.43:21-1 et seq.) as determined by the Commissioner of Labor. The Treasurer of the State shall be ex officio the treasurer and custodian of this special fund and, subject to legislative appropriation, shall administer the fund in accordance with the directions of the controller. Any balances in this fund shall not lapse at any time, but shall be continuously available, subject to legislative appropriation, to the controller for expenditure. The State Treasurer shall give a separate and additional bond conditioned upon the faithful performance of [his] the State Treasurer's duties in connection with the unemployment compensation auxiliary fund, in an amount to be fixed by the division, the premiums for such bond to be paid from the moneys in the said special fund.

(h) (1) Notwithstanding the provisions of any other law to the contrary, the duties, responsibilities, activities and powers of the controller for the collection of contributions for deposit into the unemployment compensation fund established by R.S.43:21-9 and the State disability benefits fund established by section 22 of P.L.1948, c.110 (C.43:21-46) shall be transferred to the Department of the Treasury. The State Treasurer, in addition to the duties, responsibilities, activities and powers performed pursuant to the provisions of the unemployment compensation law in accordance with R.S.43:21-1 et seq. and the Temporary Disability Benefits Law in accordance with P.L.1948, c.110 (C.43:21-25 et seq.), shall assume all duties, responsibilities, activities and powers in connection with the collection of the reports and contributions from employers as described in this section, including the receipt of periodic reports from employers, the assessment of fines and penalties for failure to submit reports or pay contributions, auditing of employer records, and the general enforcement of reporting and payment requirements.

The State Treasurer and the Commissioner of Labor shall develop a plan for the orderly transfer of the employees, positions, funding, facilities, equipment, powers and duties from the Department of Labor to the Department of the Treasury as deemed necessary and appropriate to effectuate the transfer required by this subsection. The State Treasurer and the Commissioner of Labor shall develop a plan for the continuing cooperation and coordination of personnel and functions between the two departments in matters related to the unemployment compensation law and the Temporary Disability Benefits Law as deemed necessary due to the transfer required by this subsection.

(2) All programs and positions in the Department of Labor directly related and necessary to the collection of contributions for the unemployment compensation fund or the State disability benefits fund shall be transferred to the Department of the Treasury. The transfers shall be made in accordance with the "State Agency Transfer Act," P.L.1971, c.375 (C.52:14D-1 et seq.).

(3) In addition to section 6 of P.L.1971, c.375 (C.52:14D-6), P.L......., c..........(C....................)(now pending before the Legislature as this bill) shall not affect the bulletins, plans of operation, contracts, settlements or consent agreements, or stipulations heretofore made, promulgated by, or approved by the Commissioners of Labor, or any division, bureau, board or agency within the Department of Labor, directly related to the functions, activities, powers and duties that are transferred to the Department of the Treasury pursuant to this subsection, but those bulletins, plans of operation, contracts, settlements or consent agreements, and stipulations shall continue with full force and effect until amended or repealed pursuant to law, and shall be effectuated and implemented by the State Treasurer.

(4) The State Treasurer may, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), promulgate such rules and regulations as are necessary to effectuate the purposes of P.L.............., c............... (C..............)(now pending before the Legislature as this bill).

(cf: P.L.1995, c.234, s.2)

2. Section 22 of P.L.1948, c.110 (C.43:21-46) is amended to read as follows:

22. State disability benefits fund. (a) The State disability benefits fund, hereinafter referred to as the fund, is hereby established. The fund shall remain in the custody of the State Treasurer, and to the extent of its cash requirements shall be deposited in authorized public depositories in the State of New Jersey. There shall be deposited in and credited to the fund the amount of worker and employer contributions provided under subparagraph (G) of paragraph (1) of subsection (d) of R.S.43:21-7 and subsection (e) of R.S.43:21-7, less refunds authorized by the chapter (R.S.43:21-1 et seq.) to which this act is a supplement, and the entire amount of interest and earnings from investments of the fund, and all assessments, fines and penalties collected under this act. The fund shall be held in trust for the payment of disability benefits pursuant to this act, for the payment of benefits pursuant to subsection (f) of R.S. 43:21-4, and for the payment of any authorized refunds of contributions. All warrants for the payment of benefits shall be issued by and bear only the signature of the Director of the Division of Unemployment and Temporary Disability Insurance or [his] the duly authorized agent for that purpose. All other moneys withdrawn from the fund shall be upon warrant signed by the State Treasurer and countersigned by the Director of the Division of Unemployment and Temporary Disability Insurance of the Department of Labor of the State of New Jersey. The Treasurer shall maintain books, records and accounts for the fund, appoint personnel and fix their compensation within the limits of available appropriations. The expenses of the Treasurer in administering the fund and its accounts and collecting contributions to the fund shall be charged against the administration account, as hereinafter established. A separate account, to be known as the administration account, shall be maintained in the fund, and there shall be credited to such account an amount determined to be sufficient for proper administration, not to exceed, however, 1/10 of 1% of the wages with respect to which current contributions are payable into the fund, and the entire amount of any assessments against covered employers, as hereinafter provided, for costs of administration prorated among approved private plans. The costs of administration of this act, including R.S.43:21-4(f), shall be charged to the administration account.

(b) A further separate account, to be known as the unemployment disability account, shall be maintained in the fund. Such account shall be charged with all benefit payments under R.S.43:21-4(f).

Prior to July 1 of each calendar year, the Division of Unemployment and Temporary Disability Insurance of the Department of Labor of the State of New Jersey shall determine the average rate of interest and other earnings on all investments of the State disability benefits fund for the preceding calendar year. An amount equal to the sum of the amounts withdrawn from the unemployment trust fund pursuant to section 23 hereof multiplied by such average rate shall be determined by the division and credited to the unemployment disability account as of the end of the preceding calendar year.

If the unemployment disability account shall show an accumulated deficit in excess of $200,000.00 at the end of any calendar year after interest and other earnings have been credited as provided hereinabove, the division shall determine the ratio of such deficit to the total of all taxable wages paid during the preceding calendar year, and shall make an assessment against all employers in an amount equal to the taxable wages paid by them during such preceding calendar year to employees, multiplied by such ratio, but in no event shall any such assessment exceed 1/10 or 1% of such wages; provided, however, that the assessment made against the State (including Rutgers, The State University, the University of Medicine and Dentistry of New Jersey and the New Jersey Institute of Technology) shall not exceed the sum of all benefits paid under the provisions of R.S.43:21-4(f) as the result of employment with the State. Such amounts shall be collectible by the [division] State Treasurer in the same manner as provided for the collection of employee contributions under this chapter (R.S.43:21-1 et seq.). In making this assessment, the [division] State Treasurer shall furnish to each affected employer a brief summary of the determination thereof. The amount of such assessments collected by the [division] State Treasurer shall be credited to the unemployment disability account.

As used in this section, "taxable wages" shall mean wages with respect to which employer contributions have been paid or are payable pursuant to subsections (a), (b) and (c) of R.S.43:21-7.

(c) A board of trustees, consisting of the State Treasurer, the Secretary of State, the Commissioner of Labor [and Industry], the director of the division, and the State Comptroller, is hereby created. The board shall invest and reinvest all moneys in the fund in excess of its cash requirements, and such investments shall be made in obligations legal for savings banks; provided, however, that the provisions of this subsection shall in all respects be subject to the provisions of P.L.1950, c.270 (C.52:18A-79 et seq.).

(d) There is hereby appropriated, to be paid out of the fund, such amounts as may from time to time be required for the payment of disability benefits, and such amounts as may be required each year, as contained in the annual appropriation act, for the administration of this act, including R.S.43:21-4(f).

(e) Notwithstanding the provisions of any other law to the contrary, the duties, responsibilities, activities and powers vested within the Department of Labor for the collection of contributions for deposit into the State disability benefits fund created by this section shall be transferred to the Department of the Treasury in accordance with the provisions of subsection (h) of R.S.43:21-14.

(cf: P.L.1994, c.112, s.3)

3. Section 4 of P.L.1992, c.44 (C.34:15D-15) is amended to read as follows:

4. Notwithstanding the provisions of any other law to the contrary, each employer shall: withhold in trust the amount of all workers' contributions from their wages at the time wages are paid, show the deduction on the payroll records, furnish the evidence thereof and permit any inspection of the records as prescribed by the commissioner or State Treasurer, and transmit all workers' contributions and other contributions due from the employer pursuant to this act to the [department] Department of the Treasury in a manner and at the times that the [commissioner] State Treasurer prescribes. Interest and any expense to the [department] Department of the Treasury of recovery may be assessed by the [commissioner] State Treasurer on payments not made within the prescribed due dates at the same rate as provided for pursuant to paragraph (1) of subsection (a) of R.S.43:21-14. If any employer fails to deduct the contributions of any workers at the time their wages are paid, or fails to make a deduction therefor at the time wages are paid for the next succeeding payroll period, the employer shall be solely liable for those contributions.

(cf: P.L.1992, c.44, s.4)

4. Section 5 of P.L.1992, c.44 (C.34:15D-16) is amended to read as follows:

5. If an employer fails to make any report or permit any inspection required by the commissioner or State Treasurer, as appropriate, to implement the provisions of this act, an estimate by the State Treasurer shall be made regarding the liability of the employer from information available and the employer shall be assessed for any amount due, including the amount that was withheld or that should have been withheld from its employees for deposit into the fund. Also, if, after an examination of any report filed, a deficiency is discovered with respect to the taxable wages reported, the employer shall be assessed the amount of any determined deficiency. Additional remedies through the court may be established by the [commissioner] State Treasurer, including the charging of any expenses incurred by the [department] Department of the Treasury in recovering the assessment.

(cf: P.L.1992, c.44, s.5)

5. Section 6 of P.L.1992, c.44 (C.34:15D-17) is amended to read as follows:

6. a. If an employee receives wages from more than one employer during any calendar year, and the sum of the employee's contributions deposited in the Workforce Development Partnership Fund exceeds an amount equal to 0.025% of the wages determined in accordance with the provisions of paragraph (3) of subsection (b) of R.S.43:21-7 during the calendar year beginning January 1, 1993 or any subsequent calendar year, the employee shall be entitled to a refund of the excess if a claim establishing the employee's right to the refund is made within two years after the end of the respective calendar year in which the wages are received and are the subject of the claim. The [commissioner] State Treasurer shall refund any overpayment from the fund without interest.

b. Any employee who is a taxpayer and entitled, pursuant to the provisions of subsection a. of this section, to a refund of contributions deducted during a tax year from [his] the employee's wages shall, in lieu of the refund, be entitled to a credit in the full amount thereof against the tax otherwise due on [his] the employee's New Jersey gross income for that tax year if [he] the employee submits [his] a claim for the credit and accompanies that claim with evidence of [his] the employee's right to the credit in the manner provided by regulation by the Director of the Division of Taxation. In any case in which the amount, or any portion thereof, of any credit allowed hereunder results in or increases an excess of income tax payment over income tax liability, the amount of the new or increased excess shall be considered an overpayment and shall be refunded to the taxpayer in the manner provided by subsection (a) of N.J.S.54A:9-7.

(cf: P.L.1995, c.422, s.6)

6. Section 7 of P.L.1992, c.44 (C.34:15D-18) is amended to read as follows:

7. a. (1) Notwithstanding the provisions of P.L.1992, c.44 (C.34:15D-12 et seq.) or any other law to the contrary, the duties, responsibilities, activities and powers of the commissioner for the collection of contributions for deposit into the Workforce Development Partnership Fund created pursuant to section 9 of P.L.1992, c.43 (C.34:15D-9) shall be transferred to the Department of the Treasury. The State Treasurer, in addition to the duties, responsibilities, activities and powers performed pursuant to the provisions of P.L.1992, c.44 (C.34:15D-12 et seq.), shall assume all duties, responsibilities, activities and powers in connection with the collection of the reports and contributions from employers, including the receipt of periodic reports from employers, the assessment of fines and penalties for failure to submit reports or pay contributions, auditing of employer records, and the general enforcement of reporting and payment requirements.

The State Treasurer and the commissioner shall develop a plan for the orderly transfer of the employees, positions, funding, facilities, equipment, powers and duties from the Department of Labor to the Department of the Treasury as deemed necessary and appropriate to effectuate the transfer required by this subsection. The State Treasurer and the commissioner shall develop a plan for the continuing cooperation and coordination of personnel and functions between the department and the Department of the Treasury in matters related to the implementation of the "1992 New Jersey Employment and Workforce Development Act," P.L.1992, c.43 (C.34:15D-1 et seq.) as deemed necessary due to the transfer required by this subsection.

(2) All programs and positions in the department directly related and necessary to the collection of contributions for the Workforce Development Partnership Fund shall be transferred to the Department of the Treasury. The transfers shall be made in accordance with the "State Agency Transfer Act," P.L.1971, c.375 (C.52:14D-1 et seq.).

(3) In addition to section 6 of P.L.1971, c.375 (C.52:14D-6), P.L......., c..........(C....................)(now pending before the Legislature as this bill) shall not affect the bulletins, plans of operation, contracts, settlements or consent agreements, or stipulations heretofore made, promulgated by, or approved by the commissioner, or any division, bureau, board or agency within the department, directly related to the functions, activities, powers and duties that are transferred to the Department of the Treasury pursuant to this subsection, but those bulletins, plans of operation, contracts, settlements or consent agreements, and stipulations shall continue with full force and effect until amended or repealed pursuant to law, and shall be effectuated and implemented by the State Treasurer.

b. The State Treasurer, as treasurer and custodian of the Workforce Development Partnership Fund, is hereby authorized and directed to cancel of record and to refuse to honor checks issued against the fund which have not been presented for payment within six years from the date of issuance. Upon that cancellation, revenues held on deposit for payment of the checks shall be credited to the fund.

(cf: P.L.1992, c.44, s.7)

7. Section 8 of P.L.1992, c.44 (C.34:15D-19) is amended to read as follows:

8. A schedule of fines, no fine exceeding $1,000 for a single offense, shall be established by the commissioner or State Treasurer, as appropriate, for any of the following actions or omissions with respect to the collection of contributions or the use of moneys disbursed from the fund:

a. A false statement or misrepresentation made knowingly;

b. Failure to disclose a material fact;

c. Attempt to defraud;

d. Willful failure or refusal to: withhold or transfer any contribution or other payment; furnish any report or information; or produce or permit the inspection or copying of records as required pursuant to this act; and

e. Willful violation of any provision of this act or any rule or regulation promulgated pursuant to this act.

The fines shall be recoverable in a civil action by the commissioner or State Treasurer, as appropriate, in the name of the State of New Jersey. In addition to penalties established for any person, employing unit, employer or entity, each shall be liable for each offense upon conviction before any court of competent jurisdiction at the discretion of the court. All fines shall be payable to the [commissioner] State Treasurer for deposit in the fund.

(cf: P.L.1992, c.44, s.8)

8. Section 9 of P.L.1992, c.44 (C.34:15D-20) is amended to read as follows:

9. The commissioner or State Treasurer, as appropriate, shall, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) promulgate rules and regulations necessary to implement the provisions of this act, including any requirements regarding the keeping and reporting of records and any sanctions against false statement, misrepresentation, willful violations or fraud. (cf: P.L.1992, c.44, s.9)

9. R.S.34:15-94 is amended to read as follows:

34:15-94. a. Each mutual association or stock company writing compensation or employer's liability insurance in this State, and each self-insurer, shall pay to the Commissioner of Labor a sum equal to that proportion of 150% of the total amount of moneys paid under R.S.34:15-95 during the preceding calendar year, less the amount of net assets exceeding $5,000,000.00 remaining in such fund as of December 31 of said preceding calendar year, which the total compensation payments of such mutual association, stock company or self-insurer bear to the total compensation payments made by all such mutual associations, stock companies, and self-insurers during such preceding calendar year. Such sum shall be paid by the Commissioner of Labor to the State Treasurer.

On or before August 1, 1986 the Commissioner of Labor shall recalculate payments due for calendar year 1986 in accordance with the formula provided above, and levy supplemental assessments to adjust for any difference due to be paid in satisfaction of obligations for calendar year 1986, giving full credit for payments previously due and paid on or before August 15, 1986. Such supplemental assessments, if necessary to be levied, shall be paid on or before September 15, 1986. Commencing January 1, 1987, and each calendar year thereafter, annual payments shall be calculated by the commissioner and sums due shall be paid in equal quarterly installments on or before March 15, on or before June 15, on or before September 15 and on or before December 15 of each year.

The assessment established in this subsection shall be terminated effective December 31, 1988.

b. Commencing January 1, 1989 and on the first day of each year thereafter, the Commissioner of Labor shall levy an annual surcharge upon all policyholders and self-insured employers for the purpose of providing moneys to the Second Injury Fund. Each policyholder and self-insured employer shall be liable for payment to the State Treasurer of the annual surcharge in accordance with the provisions of this section and all regulations promulgated pursuant hereto. The annual surcharge levied under this section shall be applied to all workers' compensation and employer's liability insurance policies providing coverage on or after January 1, 1989 and, in the case of self-insured employers, to coverage provided on or after January 1, 1989. Notwithstanding any law to the contrary, the surcharge levied pursuant to this section shall not apply: to any reinsurance or retrocessional transaction; to the State or any political subdivision thereof which acts as a self-insured employer; or to any workers' compensation endorsement required pursuant to section 1 of P.L.1979, c.380 (C.17:36-5.29).

c. On or before July 31 of 1988 and of each year thereafter:

(1) Each insurer and self-insured employer shall submit to the Commissioner of Labor, in a form and manner prescribed by the Commissioner of Labor, a report of the total compensation payments made by the insurer or self-insured employer during the 12-month period ending on the immediately preceding June 30th;

(2) Each insurer shall submit to the Commissioner of Insurance, in a form and manner prescribed by the Commissioner of Insurance, a report of the total earned premiums collected by the insurer on all workers' compensation or employer's liability policies written on risks located in this State pursuant to the provisions of R.S.17:17-1 et seq., during the 12-month period ending on the immediately preceding June 30th;

(3) The Commissioner of Labor shall estimate the amount of special adjustment and supplemental benefits payable by each insurer writing workers' compensation or employer's liability insurance in the State and by each self-insured employer pursuant to R.S.34:15-95 during the then current fiscal year;

(4) The Commissioner of Labor shall establish the aggregate annual surcharge to be levied upon policyholders and self-insured employers during the next following calendar year, which shall be an amount equal to 150% of the moneys estimated by the Commissioner of Labor to be payable from the Second Injury Fund during the next following calendar year, less the estimated amount of net assets exceeding $5,000,000.00 which will remain in the Second Injury Fund on December 31st of the then current calendar year;

(5) The Commissioner of Labor shall apportion the aggregate annual surcharge calculated pursuant to paragraph (4) of this subsection among policyholders as a group and self-insured employers as a separate group. Policyholders shall be liable to pay to the State Treasurer that portion of the aggregate annual surcharge that is equal to the proportion that the compensation payments made by all policyholders during the 12-month period ending on the immediately preceding June 30th bear to the total compensation payments made by all policyholders and self-insured employers during the 12-month period ending on the immediately preceding June 30th. Self-insured employers shall be liable to pay to the State Treasurer that portion of the aggregate annual surcharge that is equal to the proportion that the compensation payments made by all self-insured employers during the 12-month period ending on the immediately preceding June 30th bear to the total compensation payments made by all policyholders and self-insured employers during the 12-month period ending on the immediately preceding June 30th; and

(6) The Commissioner of Labor shall notify the Commissioner of Insurance and the State Treasurer of the aggregate annual surcharge amount applicable to policyholders during the next following calendar year.

d. On or before September 15 of 1988 and of each year thereafter:

(1) In consultation with the Commissioner of Labor, the Commissioner of Insurance shall determine the annual policyholder surcharge rate to be applied to each workers' compensation and employer's liability policy during the next following calendar year, and shall notify insurers of the annual policyholder surcharge rate to be applied to policy premiums during the next following calendar year. The annual policyholder surcharge rate shall be established as a percentage, which shall be equal to the percentage relationship that the annual surcharge amount which is applicable to all policyholders bears to the total earned premiums for workers' compensation and employer's liability coverage written on risks located in this State for the 12-month period ending on the immediately preceding June 30th. (2) The Commissioner of Labor shall notify each self-insured employer of the amount of the annual surcharge applicable to that self-insured employer during the next following calendar year. The net annual surcharge for each self-insured employer shall be established as a pro rata portion of the annual surcharge applicable to all self-insured employers, which shall be chargeable to the self-insured employer in the proportion that the self-insured employer's compensation payments during the 12-month period ending on the immediately preceding June 30th bear to the total compensation payments made by all self-insured employers during the 12-month period ending on the immediately preceding June 30th, less the estimated amount of special adjustment and supplemental benefits payable by that self-insured employer pursuant to R.S.34:15-95 during the then current fiscal year.

e. (1) Every insurer providing workers' compensation and employer's liability insurance shall collect from each of its policyholders, on behalf of the Commissioner of Labor and State Treasurer and in accordance with subsections b., c. and d. of this section, an amount equal to the annual policyholder surcharge rate established by the Commissioner of Insurance pursuant to subsection d. of this section, multiplied by the amount of the policyholder's premium. The surcharge to be collected from the policyholder shall be stated separately on the policy or billing statement and be collected at the same time and in the same manner that the premium or other charges for the coverage are collected. On or before the 30th day after the end of the calendar quarter commencing January 1, 1989, and on or before the 30th day following the end of each calendar quarter thereafter, each insurer shall report to the [Commissioner of Labor] State Treasurer, on forms as the [commissioner] State Treasurer may require, the total amount of its workers' compensation and employer's liability insurance earned premiums for the preceding quarterly accounting period, and remit the surcharge collected from policyholders on those premiums, less special adjustment and supplemental benefits paid during the preceding calendar quarter by the insurer pursuant to the workers' compensation law, R.S.34:15-1 et seq. No insurer or its agent shall be entitled to any portion of any surcharge imposed pursuant to this section as a fee or commission for its collection nor shall that surcharge be subject to any taxes, licenses or fees.

(2) On or before the 30th day after the end of each calendar quarter commencing January 1, 1989, and on or before the 30th day following the end of each calendar quarter thereafter, each self-insured employer shall remit to the [Commissioner of Labor] State Treasurer an amount equal to one-fourth of the effective net annual surcharge as established for that self-insured employer during the then current calendar year pursuant to subsection d. of this section, less special adjustment and supplemental benefits paid during the preceding calendar quarter by the self-insured employer pursuant to the workers' compensation law, R.S.34:15-1 et seq.

f. The Commissioner of Labor shall promulgate within 180 days of the effective date of this act and in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), any rules and regulations as may be necessary for the apportionment [and collection] of annual surcharges from policyholders and self-insured employers covered by this section.

g. The Commissioner of Insurance shall promulgate within 180 days of the effective date of this act and in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), any rules and regulations as may be necessary for the collection, and provision to the Commissioner of Labor, of information with respect to earned premiums of insurers and the establishment of the annual surcharge rate for policyholders.

h. For each 30-day period or part thereof during which a policyholder, self-insured employer, or insurer fails to make a payment or transfer of payment as required by this section or regulations promulgated pursuant hereto, a penalty of one-half of one percent (0.5%) of the amount of delinquent payment or transfer of payment shall be assessed against the delinquent policyholder, self-insured employer or insurer. In no case of single failure, however, shall penalties assessed under this section exceed five percent (5.0%) of the amount of surcharge unpaid or untransferred. Penalties assessed under this subsection shall be collected in a civil action by a summary proceeding brought by the [Commissioner of Labor] State Treasurer pursuant to "the penalty enforcement law," N.J.S.2A:58-1 et seq., and shall be deposited by the [commissioner] State Treasurer in the Second Injury Fund.

i. For each 30-day period during which an insurer or self-insured employer fails to file a report as required by this section, the Commissioner of Labor, Commissioner of Insurance or State Treasurer, as appropriate, a shall assess a penalty of $100.00 against the insurer or self-insured employer and, upon collection thereof, shall deposit those monies in the "uninsured employer's fund." As a result of any single failure, however, no such penalty shall exceed a total of $500.00. During the period of any such failure to file this report, the estimate by the Department of Labor of the amounts of such compensation payments or earned premiums shall be used for the purposes cited in the workers' compensation law, R.S.34:15-1 et seq. j. The Commissioner of Labor may, with the authorization of and appropriation by the Legislature, transfer from the Second Injury Fund an amount necessary for the cost of administration of the Division of Workers' Compensation in the Department of Labor.

k. As used in this section, "policyholder" means a holder of a policy of workers' compensation or employer's liability insurance issued by an insurer. "Insurer" means a domestic, foreign or alien mutual association or stock company writing workers' compensation or employer's liability insurance on risks located in this State and subject to premium taxes pursuant to P.L.1945, c.132 (C.54:18A-1 et seq.). "Self-insured employer" means an employer which self-insures for workers' compensation or employer's liability insurance pursuant to the provisions of R.S.34:15-77.

l. a. (1) Notwithstanding the provisions of any other law to the contrary, the duties, responsibilities, activities and powers of the Commissioner of Labor for the collection of surcharges for deposit into the Second Injury Fund created by R.S.34:15-95 shall be transferred to the Department of the Treasury. The State Treasurer, in addition to the duties, responsibilities, activities and powers performed for the Second Injury Fund, shall assume all duties, responsibilities, activities and powers in connection with the collection of the reports and surcharges from policyholders, insurers and self-insured employers, including the receipt of periodic reports, the assessment of fines and penalties for failure to submit reports or pay surcharges, auditing of records, and the general enforcement of reporting and payment requirements.

The State Treasurer and the Commissioner of Labor shall develop a plan for the orderly transfer of the employees, positions, funding, facilities, equipment, powers and duties from the Department of Labor to the Department of the Treasury as deemed necessary and appropriate to effectuate the transfer required by this subsection. The State Treasurer, the Commissioner of Labor and the Commissioner of Insurance shall develop a plan for the continuing cooperation and coordination of personnel and functions between the three departments in matters related to the administration of the Second Injury Fund as deemed necessary due to the transfer required by this subsection.

(2) All programs and positions in the Department of Labor directly related and necessary to the collection of surcharges for the Second Injury Fund shall be transferred to the Department of the Treasury. The transfers shall be made in accordance with the "State Agency Transfer Act," P.L.1971, c.375 (C.52:14D-1 et seq.).

(3) In addition to section 6 of P.L.1971, c.375 (C.52:14D-6), P.L......., c..........(C....................)(now pending before the Legislature as this bill) shall not affect the bulletins, plans of operation, contracts, settlements or consent agreements, or stipulations heretofore made, promulgated by, or approved by the Commissioner of Labor, or any division, bureau, board or agency within the Department of Labor, directly related to the functions, activities, powers and duties that are transferred to the Department of the Treasury pursuant to this subsection, but those bulletins, plans of operation, contracts, settlements or consent agreements, and stipulations shall continue with full force and effect until amended or repealed pursuant to law, and shall be effectuated and implemented by the State Treasurer.

(cf: P.L.1990, c.46, s.1)

10. This act shall take effect immediately, but sections 1 through 9 shall remain inoperative until the first day of the fourth month following enactment, provided, however, that the Commissioner of Labor, the Commissioner of Insurance and State Treasurer may take such anticipatory actions in advance of the operative date as they may deem appropriate to properly implement this act.

STATEMENT

Under this bill, the responsibility for the collection of required contributions to the unemployment compensation fund (R.S.43:21-9), State disability benefits fund (section 22 of P.L.1948, c.110 ; C.43:21-46), Workforce Development Partnership Fund (section 9 of P.L.1992, c.43; C.34:15D-9) and Second Injury Fund (R.S.34:15-95) are transferred from the Commissioner of Labor to the Department of the Treasury.

The purpose of this bill is to consolidate and align the structure and functions of the Executive Branch in the interest of efficiency and economy. The Department of the Treasury has the most extensive experience and resources of all State departments for the collection of financial obligations from individuals and business entities. Therefore, the Department of the Treasury should be the one central location for revenue management and collection in this State. With this bill, financial accountability and fiscal control of these funds will be strengthened, receipts processing and debt collection will be streamlined, total net receivables owed to these funds may be reduced, and businesses and individuals will be made more accountable for their obligations to these funds.

Transfers from Department of Labor to Department of the Treasury responsibility for collecting contributions to unemployment compensation fund, State disability benefits fund, Workforce Development Partnership Fund and Second Injury Fund.