Unemployment; Disputed Amounts

Requires the department of labor and industrial relations to pay
interest on disputed amounts held when it does not prevail.

HOUSE OF REPRESENTATIVES                H.B. NO.470        
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The employment security law, commonly referred
 2 to as the unemployment compensation law, is administered by the
 3 department of labor and industrial relations.  Under the law, the
 4 department may assess any employing unit that it determines is in
 5 arrears regarding contributions to the unemployment compensation
 6 fund.  Before any business may appeal a departmental
 7 determination, the business must pay the fines and interest that
 8 is allegedly owed.  If the business wins the appeal, the disputed
 9 amounts are returned to the business without interest or costs.
10 This appeal process may take as long as three years to complete.
11 When the department can make determinations of delinquent
12 contributions without any consequences that act to tie up needed
13 operational funds of a business, a lopsided distribution of
14 responsibility is created.
15      The purpose of this Act is to promote a business-friendly
16 environment by balancing the responsibilities of the department
17 of labor and industrial relations and business entities.  This
18 Act requires the department to pay interest on disputed amounts

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                                     H.B. NO.470        

 1 and the costs of appeal when a business prevails in the dispute.
 2 The amount of interest is the same amount due under the income
 3 tax law.  This Act also requires the appeal process to be
 4 completed within ninety days.
 5      SECTION 2.  Section 383-74, Hawaii Revised Statutes, is
 6 amended to read as follows:
 7      "383-74  Appeal; correction of assessment or contributions.
 8 Any person aggrieved by any assessment of a contribution or a
 9 penalty or contributions assessed pursuant to this chapter,
10 having paid the contribution or penalty, may appeal from the
11 assessment by filing a written notice of appeal with the
12 department within twenty days after the date of mailing of the
13 notice of assessment to the person's last known address.  The
14 appeal shall be heard by the referee in accordance with
15 applicable provisions of sections 383-38 and 383-39[.]; provided
16 that all hearings shall be concluded within sixty days of the
17 filing of written notice of appeal, and a final judgment shall be
18 rendered within ninety days of the written notice of appeal.  Any
19 amount determined to have been erroneously paid as a result of
20 the final determination of the appeal in favor of the employing
21 unit, appealing party, or as a result of a final judgment for the
22 employing unit in an action brought pursuant to section 40-35,

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                                     H.B. NO.470        

 1 shall be refunded, [without] with interest paid at the rate of
 2 two-thirds of one per cent per month or fraction of a month, and
 3 [without] with the addition of any other [charges, in the same
 4 manner as other refunds under this chapter.] costs of the appeal
 5 that may be included in the final judgment.  Notwithstanding any
 6 other provisions of law to the contrary, any amount which is paid
 7 under protest or which is covered by any appeal or action
 8 referred to in this section shall not be held as a special
 9 deposit, but the amount shall in all respects be subject to
10 sections 383-122 and 383-127 to the same effect as though the
11 amount had not been paid under protest and was not covered by the
12 appeal or action."
13      SECTION 3.  Statutory material to be repealed is bracketed.
14 New statutory material is underscored.
15      SECTION 4.  This Act shall take effect upon its approval.
17                              INTRODUCED BY:______________________