§383-62  Rate of contributions; financing
benefits paid to government employees and employees of nonprofit organizations. 
(a)  Except as otherwise provided in this section, each employer shall pay
contributions determined in accordance with sections 383-66 and 383-68.



Notwithstanding any other provision of this
part to the contrary, for the calendar years 1977 and 1978 each employer
(except any employer making payments instead of contributions pursuant to
subsection (b) or (d)) shall pay contributions equal to three and one-half per
cent of wages paid by the employer during such calendar years.



(b)  In lieu of contributions required of
employers under this chapter, the State and its political subdivisions and
instrumentalities (hereinafter referred to as "governmental
employers" or "governmental employer" as the case may be) shall
pay in advance to the director of labor and industrial relations for the fund
an amount equivalent to:



(1)  The amount of regular benefits plus one-half the
amount of extended benefits payable in each calendar quarter beginning prior to
January 1, 1979, to individuals based on wages paid by governmental
employers; and



(2)  The amount of regular benefits plus the amount of
extended benefits payable in each calendar quarter beginning after
December 31, 1978, to individuals based on wages paid by governmental
employers.



The director shall notify each governmental
employer of the amount of money required to be paid to the director.  Such
amounts shall be paid to the director prior to the commencement of the calendar
quarter in which benefits are payable.



If benefits paid an individual are based on
wages paid by one or more governmental employers and one or more other
employers, or on wages paid by two or more governmental employers, the amount
payable by a governmental employer to the director for the fund shall be in
accordance with the provisions of paragraphs (1) and (2) of subsection (e) of
this section, governing the allocation of benefit costs among employers liable
for payments in lieu of contributions and between such employers and employers
liable for contributions.



For the purposes of paragraphs (1) and (2) of
subsection (e), governmental employers are employers liable for payments in
lieu of contributions.  The amount of payment required from governmental
employers shall be ascertained by the department of labor and industrial
relations and shall be paid from the general funds of such governmental
employers upon approval by the comptroller of the State or the director of finance
of the respective counties, except that to the extent that benefits are paid on
the basis of wages paid by governmental employers from special administrative
funds, the payment into the unemployment compensation fund shall be made from
such special funds.



(c)  Notwithstanding the provisions of
subsection (b) of this section to the contrary, any governmental employer which
is or becomes subject to this chapter after December 31, 1977, may, in
accordance with this subsection (c), elect to pay contributions pursuant to the
provisions of this part (with the exception of the provisions in subsection (b)
and subsections (d) through (g) of this section) applicable to other
employers.  For the purposes of this subsection (c) the term "governmental
employer" shall apply to the State and to each county of this State, as
separate and individual employers.



(1)  Any governmental employer which is subject to
this chapter on January 1, 1978, may elect to become liable for
contributions for a period of not less than two calendar years beginning with
January 1, 1978; provided it files with the department a written notice of
its election within the thirty-day period following such date.



(2)  Any governmental employer which becomes subject
to this chapter after January 1, 1978, may elect to become liable for
contributions for a period beginning with the date on which such subjectivity
begins and continuing for not less than two calendar years thereafter by filing
with the department a written notice of its election within the thirty-day
period following the date on which such subjectivity begins.



(3)  Any governmental employer which has been making
payments in lieu of contributions in accordance with subsection (b) of this
section for a period subsequent to January 1, 1978, may elect to become
liable for contributions for a period of not less than two calendar years
beginning with January 1 of the year following the year in which the
election is made by filing with the department a written notice of its election
not later than thirty days prior to the beginning of any calendar year.



(4)  Any governmental employer which makes an election
in accordance with paragraph (1), (2), or (3) of this subsection shall continue
to be liable for contributions until it files with the department a written
notice terminating its election not later than thirty days prior to the
beginning of the calendar year for which such termination shall be effective.



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



(6)  The department shall notify each governmental
employer of any determination which it may make of the effective date of any
election which such governmental employer makes and of any termination of such
election.  Such determination shall be conclusive upon such governmental
employer unless, within fifteen days after the notification was mailed or
delivered to it, such governmental employer files with the department an
application for review and redetermination, setting forth the reasons
therefor.  The department shall promptly review and reconsider its
determination and shall thereafter issue a redetermination in any case in which
such application has been filed.  Any such redetermination shall be conclusive
upon the governmental employer unless, within fifteen days after the
redetermination was mailed or otherwise delivered to it, the governmental
employer files written notice of appeal with the department setting forth the
reasons for the appeal.  The appeal shall be heard by a referee in accordance
with applicable provisions of sections 383-38 and 383-39, and the decision of
the referee shall be subject to the provisions of section 383-41.



(7)  Should any governmental employer, having made
payments in lieu of contributions in accordance with subsection (b) of this
section, elect to pay contributions under this part, any amount of positive
reserve balance remaining in the self-financing account of such employer after
all liabilities against such account under subsection (b) of this section have
been satisfied shall be refunded to such employer.



(8)  Any governmental employer which elects to become
liable for contributions under this part shall pay contributions for the first
year of such election at the rate which applies to employers who become subject
to this chapter during such year.



(d)  Benefits paid to employees of nonprofit
organizations shall be financed in accordance with the provisions of this
subsection.  For the purpose of this subsection, a nonprofit organization is an
organization (or groups of organizations) described in section 501(c)(3) of the
United States Internal Revenue Code which is exempt from income tax under
section 501(a) of such code.



(1)  Liability for contributions and election of
reimbursement.  Any nonprofit organization which is, or becomes, subject to
this chapter on or after January 1, 1972, shall pay contributions under
the provisions of this part (with the exception of the provisions in subsection
(b) of this section) applicable to other employers unless it elects, in
accordance with this paragraph, to pay to the director of labor and industrial
relations for the fund an amount equal to the amount of regular benefits and of
one-half of the extended benefits paid, that is attributable to service in the
employ of such nonprofit organization, to individuals for weeks of unemployment
which begin during the effective period of such election.



(A)  Any nonprofit organization which 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 two
calendar years beginning with January 1, 1972, provided it files with the
department a written notice of its election within the thirty-day period immediately
following such date, or within a like period immediately following the date of
enactment of this subparagraph, whichever occurs later.



(B)  Any nonprofit organization which becomes
subject to this chapter after January 1, 1972, may elect to become liable
for payment in lieu of contributions for a period beginning with the date on
which such subjectivity begins and continuing for not less than two calendar
years thereafter 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.



(C)  Any nonprofit organization which makes an
election in accordance with subparagraph (A) or (B) of this paragraph will
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 the beginning of the calendar year for which such termination
shall be effective.



(D)  Any nonprofit organization which has been
paying contributions under this chapter for a period subsequent to
January 1, 1972, may change to a reimbursable basis by filing with the
department not later than thirty days prior to the beginning of any calendar
year a written notice of election to become liable for payments in lieu of
contributions.  Such election shall not be terminable by the organization for
that and the next calendar year.



(E)  The department may for good cause extend
the period within which a notice of election, or a notice of termination, must
be filed and may permit an election to be retroactive but not any earlier than
with respect to benefits paid after December 31, 1971.



(F)  The department, in accordance with such
regulations as the director of labor and industrial relations may prescribe,
shall notify each nonprofit organization of any determination which it may make
of such organization's status as an employer and of the effective date of any
election which such organization makes and of any termination of such
election.  Such determination shall be conclusive upon such organization
unless, within fifteen days after the notice thereof was mailed to its last
known address or otherwise delivered to it, such organization files with the
department an application for review and redetermination, setting forth the
reasons therefor.  The department shall promptly review and reconsider its
determination and shall thereafter issue a redetermination in any case in which
such application has been filed.  Any such redetermination shall be conclusive
upon the organization unless, within fifteen days after the redetermination was
mailed to its last known address or otherwise delivered to it, the organization
files written notice of appeal with the department, setting forth the reasons
for the appeal.  The appeal shall be heard by a referee in accordance with
applicable provisions of sections 383-38 and 383-39, and the decision of the
referee shall be subject to the provisions of section 383-41.



(2)  Reimbursement payments.  Payments in lieu of contributions
shall be made in accordance with the provisions of subparagraph (A).



(A)  As determined by the director of labor and
industrial relations, the department shall bill each nonprofit organization (or
group of such organizations) which has elected to make payments in lieu of
contributions for an amount equal to the full amount of regular benefits plus
one-half of the amount of extended benefits paid during the week, or other
prescribed period, that is attributable to service in the employ of such organization
other than previously uncovered services as defined in section 383-22(b).



(B)  Payment of any bill rendered under
subparagraph (A) shall be made not later than thirty days after such bill was
mailed to the last known address of the nonprofit organization or was otherwise
delivered to it, unless there has been an application for review and
redetermination in accordance with subparagraph (D).



(C)  Payments made by any nonprofit
organization under the provisions of this subsection shall not be deducted or
deductible, in whole or in part, from the remuneration of individuals in the
employ of the organization.



(D)  The amount due specified in any bill from
the department shall be conclusive and binding upon a nonprofit organization
unless, within fifteen days after the notice thereof was mailed to its last
known address or otherwise delivered to it, such organization files with the
department an application for review and redetermination, setting forth the
reasons therefor.  The department shall promptly review and reconsider the
amount due specified in the bill and shall thereafter issue a redetermination
in which such application has been filed.  Any such redetermination shall be
conclusive on the organization unless, within fifteen days after the redetermination
was mailed to its last known address or otherwise delivered to it, the
organization filed written notice of appeal with the department, setting forth
the reasons for the appeal.  The appeal shall be heard by a referee in
accordance with applicable provisions of sections 383-38 and 383-39, and the
decision of the referee shall be subject to the provisions of section 383-41.



(3)  Provision of security.  Any nonprofit
organization that elects to become liable for payments in lieu 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.



(A)  The amount of the deposit required by this
paragraph shall be equal to .2 per cent of the organization's total wages paid
for employment during the calendar year immediately preceding the effective
date of the election.  If the nonprofit organization did not pay wages in each
of the four calendar quarters of such calendar year, the amount of the deposit
shall be as determined by the department.



(B)  Any deposit of money in accordance with
this paragraph shall be retained by the department in an escrow account until
liability under the election is terminated, at which time it shall be returned
to the organization, less any deductions as hereinafter provided.  The
department may deduct from the money deposited under this paragraph by a
nonprofit organization to the extent necessary to satisfy any due and unpaid
payments in lieu of contributions.  The department shall require the
organization within thirty days following any deduction from a money deposit
under the provisions of this subparagraph to deposit sufficient additional
money to make whole the organization's deposit at the prior level.  The
department may, at any time, review the adequacy of the deposit made by any
organization.  If, as a result of such review, the department determines that
an adjustment is necessary, it shall require the organization to make
additional deposit within thirty days of written notice of its determination or
shall return to the organization such portion of the deposit as it no longer
considers necessary, whichever action is appropriate.  Disposition of income
from moneys held in escrow shall be governed by the applicable provisions of
the state law.



(C)  If any nonprofit organization fails to
make a deposit, or to increase or make whole the amount of a previously made
deposit, as provided under this paragraph, the department may terminate such
organization's election to make payments in lieu of contributions and such
termination shall continue for not less than the
four-consecutive-calendar-quarter period beginning with the quarter in which
such termination becomes effective; provided that the department may extend for
good cause the applicable deposit or adjustment period by not more than thirty
days.



(e)  Each employer, other than government
employers, that is liable for payments in lieu of contributions under this
section shall pay to the director of labor and industrial relations for the
fund the amount of regular benefits plus the amount of one-half of extended
benefits paid that are attributable to service in the employ of such employer. 
If benefits paid to an individual are based on wages paid by more than one
employer and one or more of such employers are liable for payments in lieu of
contributions, the amount payable to the fund by each employer that is liable
for such payments shall be determined in accordance with the provisions of
paragraph (1) or paragraph (2).



(1)  Proportionate allocation when fewer than all
base-period employers are liable for reimbursement.  If benefits paid to an
individual are based on wages paid by one or more employers that are liable for
payments in lieu of contributions and on wages paid by one or more employers
that are liable for contributions, the amount of benefits payable by each
employer that is liable for payments in lieu of contributions shall be an
amount which bears the same ratio to the total benefits paid to the individual
as the total base-period wages paid to the individual by such employer bear to
the total base-period wages paid to the individual by all of the individual's
base-period employers.



(2)  Proportionate allocation when all base-period
employers are liable for reimbursement.  If benefits paid to an individual are
based on wages paid by two or more employers that are liable for payments in
lieu of contributions, the amount of benefits payable by each such employer
shall be an amount which bears the same ratio to the total benefits paid to the
individual as the total base-period wages paid to the individual by such
employer bear to the total base-period wages paid to the individual by all of
the individual's base-period employers.



(f)  Two or more employers, including
governmental employers, that have become liable for payments in lieu of
contributions, may file a joint application to the department of labor and
industrial relations 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 employers.  Each such application shall identify and authorize a
group representative to act as the group's agent for purposes of this
subsection.  Upon its approval of the application, the department shall
establish a group account for such employers effective as of the beginning of
the calendar quarter in which the department receives the application, and it
shall notify the group's representative of the effective date of the account. 
Such account shall remain in effect for not less than two years and thereafter
until terminated at the discretion of the department or upon application by the
group.  The director of labor and industrial relations shall prescribe such
regulations as the director deems necessary with respect to applications for
establishment, maintenance and termination of group accounts that are
authorized by this paragraph, 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 paragraph by members of the group and the time and
manner of such payments.



(g)  When a nonprofit organization terminates
its self-financing status and elects to pay contributions under this chapter,
any remaining amount of positive reserve balance in its self-financing account
will be transferred to its contributory reserve account.  The department shall
determine the contribution rate of such employer in accordance with provisions
of section 383-66(2). [L 1939, c 219, §7(b); am L 1941, c 304, §1, subs 20; RL
1945, §4247; am L 1953, c 41, §1(5); RL 1955, §93-61; am L 1959, c 222, §1(3);
am L Sp 1959 2d, c 1, §27; am L 1964, c 55, §3; HRS §383-62; am L 1971, c 187,
§7; am L 1973, c 120, §2; am L 1976, c 157, §§4, 6; am L 1977, c 148, §6 and c
169, §1; am L 1980, c 232, §20; gen ch 1985; am L 1986, c 180, §1]



 



Attorney General Opinions



 



  Subsection (b) is in itself an authorization for payment of
benefits from the general funds of the governmental employers and moneys from
said funds may be used for payment of benefits to legislative employees.  Att.
Gen Op. 61-63.



 



Case Notes



 



  Taxpayer's delay in filing its self-financing application did
not constitute good cause.  70 H. 72, 762 P.2d 796.



  Cited:  41 H. 508, 509.