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SENATE FLOOR VERSION
April 10, 2023
ENGROSSED HOUSE
BILL NO. 2456 By: Hill of the House
and
Paxton of the Senate
An Act relating to labor; amending 40 O.S. 2021,
Sections 3-109.3, 3-301, 3-311, 3-806, 6-202, 6-204,
and 6-205, which relate to the Employment Security
Act of 1980; modifying dates for certain rate
reduction; increasing penalt ies; modifying refund of
remaining credit balance; removing expenditure limit;
modifying technology reinvestment apportionment;
providing for limit of fund; and providing an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLA HOMA:
SECTION 1. AMENDATORY 40 O.S. 20 21, Section 3-109.3, is
amended to read as follows:
Section 3-109.3
RATE REDUCTION FOR TECHNOLOGY REINVESTMENT APPORTIONMENT.
Notwithstanding the provisions of Sections 3 -109, 3-110.1 and 3-
113 of Title 40 of the Oklah oma Statutes this title, for the time
period beginning January 1, 2018, and ending December 3 1, 2022 2023,
and ending December 31 , 2027, the tax rate computed for or assigned
to an employer shall be reduced by five percent (5%). Provided, the
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tax rate of employers assigned a tax rate pursuant to Section 3-
110.1 of Title 40 of the Oklahoma Statutes shall not be reduced to
less than one percent (1%). Provided further, employers who qualify
for an earned tax rate calculated pursuant to Section 3 -109 of Title
40 of the Oklahoma Statutes , and are given the highest tax rate in
the rate table for the given yea r, shall not be eligible for the
rate reduction provided for in this section.
SECTION 2. AMENDATORY 40 O.S. 2021, Section 3 -301, is
amended to read as follows:
Section 3-301.
PENALTY AND INTEREST ON PAST-DUE CONTRIBUTIONS.
A. If contributions are not paid on the date on which they are
due and payable as prescribed by the Oklahoma Employment Security
Commission, the whole or part thereafter remaining unpaid shall bear
interest at the rate of one perc ent (1%) per month for each mont h or
fraction thereof from and after such date until payment is received
by the Commission. The date on which payment of contributions is
deemed to have been received may be determined by such rules as the
Commission may prescribe.
B. If any employer fails or refuses to file contribution and
wage reports required under the provisions of this act within
fifteen (15) days after written notice has been mailed to the
employer by the Commission or its representative regardless of
whether or not any wages or taxable wages were paid, there shall
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accrue a penalty of One Hundred Dollars ($100.00) and in Two Hundred
Dollars ($200.00). Said penalty shall automatically be inflation -
adjusted by the cumulative rate of inflation as measur ed by the
Bureau of Labor Statistics – Consumer Price Index. In addition to
such penalty, there shall be a penalty of ten percent (10%) added to
the total contributions due, collected and paid. Such penalties
shall be in addition to any interest due. Th e provisions of this
subsection shall not apply to employers that are subject to
subsection B of Section 3-806 of this title.
SECTION 3. AMENDATORY 40 O.S. 2021, Section 3 -311, is
amended to read as follows:
Section 3-311.
FORFEITURE OF TERMINATED EMPLOYER UNEMP LOYMENT TAX ACCOUNT
OVERPAYMENTS.
A. It is the fiduciary duty of the Oklahoma Employment Security
Commission to return overpayment s received in the employer's
unemployment tax account . Upon the termination of the employer's
unemployment tax account, the Commission will issue a refund of any
remaining credit balance that is equal to or greater than One
Hundred Dollars ($100.00) by mailing it to the last addre ss provided
by the employer. If an e mployer's unemployment tax account has been
terminated and has a credit balance that has been at that level for
a period of one hundred eighty (180) days or more without a refund
being requested from the employer, the C ommission will reduce the
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balance of that unemployment tax accou nt to zero (0) and consider
the credit to be forfeited after the Commission has exercised its
fiduciary duty.
B. Once the Commission has completed its fiduciary duty in
facilitating the retur n of the credit to the employer, base d upon
the most current mailing address provided by the employ er, the
Commission can assume its fiduciary duty is completed. If the
refund of the overpayment is returned to the Commission, the
employer shall consider t he funds forfeited and will be prohib ited
from requesting the c redit balance in the future. All re turns of
overpayment shall be returned to the clearing account as set forth
in Section 3-604 of Title 40 of the Okla homa Statutes this title.
SECTION 4. AMENDATORY 40 O.S. 2021, Section 3 -806, is
amended to read as follows:
Section 3-806.
PAYMENT OF IN-LIEU CONTRIBUTIONS.
A. At the end of each calendar quarter the Oklahoma Employment
Security Commission shall notify in writing each nonprofit
organization, or the agent of a group of nonprofit o rganizations,
which has elected to mak e payments in lieu of contributions, the
amount, if any, equal to the full amount of regular benefits plus
one-half (1/2) of the amount of extended benefits paid by the
Commission during the quarter that is attributabl e to service in the
employ of the organization or the members of a group of the
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organizations. The full amount shall include all amounts paid as
benefits that are attributable to base period wages paid by the
organization, including any benefit amounts pa id in error. The
notification shall b e deemed and treated as an assessment of
contributions and the payment of the amount owing shall be collected
as contributions, interest, penalty and fees, if any, are collected,
in accordance with the provisions of th e Employment Security Act of
1980. The employer, or group of employers, shall have the rights
and remedies provided by the Employment Security Act of 1980 with
respect to assessments of contributions, including the right of
protest, hearing and appeal. T he Commission shall make its
assessment or amend its assessment within three (3) years of the
ending date of the calendar quarter to which the assessment or
amendment applies. If no protest is filed or if filed and confirmed
by the Commission or its autho rized representatives, said assessment
shall be immediately due and payable and shall bear interest after
forty-five (45) days at the rate of one percent (1%) per month until
paid. If any nonprofit organization or group of organizations fails
or refuses to pay said assessment after same has b ecome delinquent
within forty-five (45) days after written request has been mailed to
the organization or the agent of the group by the Commission or its
representative, a penalty of five percent (5%) of the amount due
shall be added thereto, collected and paid. In the case of group
accounts, assessments and penalty and interest provided in this
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subsection may be prorated in accordance with Section 3 -809 of this
title. All collections made shall be deposited in the Un employment
Compensation Fund.
B. The electing organization, or group of organizations, shall
file reports of wages paid, in the same time and manner as required
of nongovernmental employers for profit. If any electing
organization, or group of organizati ons, fails or refuses to file
its wage report within fifteen (15) days after written notice, a
penalty of Ten Dollars ($10.00) Twenty Dollars ($20.00) for each day
until the report is filed with a maximum of One Hundred Dollars
($100.00) Two Hundred Dollars ( $200.00) is hereby imposed against
the organization or group and shall be collected and paid.
C. Payments made by any nonprofit organization under the
provisions of this section shall not be deducted or deductible, in
whole or in part, from the remuneration of individuals in the employ
of the organization.
SECTION 5. AMENDATORY 40 O.S. 2021, Section 6-202, is
amended to read as follows:
Section 6-202.
EXPENDITURES FROM FUND.
A. The monies in the OESC Technology Fund shall be used fo r the
following purposes:
1. To purchase or lease new technology systems hardware for the
Oklahoma Employment Security Commission to be used in its mission to
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provide employment services, unemployment insurance and economic
research for the citizens of th is state as well as the
administration of these programs;
2. To purchase or lease any auxiliary or peripheral equipment
necessary for the operation of the new technology systems;
3. To pay for the maintenance of all OESC technology system
hardware;
4. To purchase or lease any and all software needed for the
operation of the new technology systems;
5. To pay for all OESC technology system software license fees;
6. To pay for all programming and analysis necessary to make
the new technology system operat ional;
7. To pay for all testin g, designing, engineering, planning,
networking and training to make the new technology system
operational;
8. To pay for all shipping and installation charges for the
technology system and its auxiliary and peripheral equi pment;
9. To contract with vend ors and hire personnel as necessary to
accomplish the modernization effort;
10. To analyze business processes and develop requirements for
Requests for Proposals;
11. To fund project planning, project management, strategy
development and project consulti ng services; and
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12. To make refunds of money erroneously collected and
deposited in the OESC Technology Fund.
B. The total expenditures from the OESC Technology Fund shall
not exceed Thirty-nine Million Dollars ($39,000,0 00.00) between
January 1, 2018, and December 31, 2022, without legislative
authority. Prior to expenditures authorized by paragraphs 1, 4, 6,
7, 9, 10 and 11 of subsection A of this section, the Chief
Information Officer of the Office of Management and En terprise
Services shall be consu lted for recommendations. The Office of
Management and Enterprise Services shall provide periodic oversight
of the technology modernization efforts and may assist the Oklahoma
Employment Security Commission in any manner ne cessary to accomplish
the purposes of this fund, including requiring the Oklahoma
Employment Security Commission to provide regular reports to the
Office of Management and Enterprise Services on the technology
modernization efforts.
C. If any money remain s in this fund after the new tec hnology
system has been brought online and made fully operational, that
excess money shall be transferred to the Unemployment Compensation
Fund.
SECTION 6. AMENDATORY 40 O.S. 2021, Section 6 -204, is
amended to read as follows:
Section 6-204.
TECHNOLOGY REINVESTMENT APPORTIONMENT.
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A. 1. For the period from beginning January 1, 2018, to
December 31, 2022 2023, and ending December 31, 2027 , each employer
subject to the provisions of Sections 3 -109, 3-110.1 and 3-113 of
Title 40 of the Oklahoma Statutes this title shall be required to
pay an OESC Technology Reinvestment Apportionment equal to five
percent (5%) of the unemployment taxes that would be owed to the
Oklahoma Employment Security Commission before any rate reduction is
made pursuant to Section 3-109.3 of this title. This apportionment
shall be in addition to any contribution which that employ er is
required to make pursuant to the provisions of the Employment
Security Act of 1980.
2. The apportionment provided for in this section shall not be
considered part of any unemployment taxes required of an individual
employer pursuant to the Employmen t Security Act of 1980, nor shall
it be considered for purposes of determining the individual
employer's tax rate.
B. Employers assigned a tax rate pursuant to Section 3-110.1 of
Title 40 of the Oklahoma Statutes this title shall pay an OESC
Technology Reinvestment Apportionment equal to the rate red uction
granted them pursuant to Section 3 -109.3 of this title.
C. Employers who qualif y for an earned tax rate calc ulated
pursuant to Section 3-109 of this title, and are given the highest
tax rate in the rate table for the given year, shall be exempt fro m
the provisions of this section.
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D. Employers making payments in lieu of contribution s pursuant
to Sections 3-702, 3-705 and 3-806 of this title shall be exempt
from the provisions of this section.
E. D. The apportionment shall be made and collected by the
Oklahoma Employment Security Commission for deposit, on a monthly
basis, to the credit of the OESC Technology Fund . Provided, all
monies received by the Oklahoma Employment Security Commission for
the account of the OES C Technology Fund, upon receipt, sh all be
deposited in a clearance account.
F. E. The Oklahoma Employment Security Com mission shall
promulgate such rules as may be necessary to implement the
provisions of Sections 3-109.3 and 6-201 to through 6-205 of this
title.
G. F. The Oklahoma Employment Security Commission shall create
an annual report detailing the collection of the appor tionment funds
and the expenditures from the OESC Technology Fund. The report
shall be filed on or before March 31 of each year following the
effective date of this act, and shall continue until all money in
the OESC Technology Fund is expended or transfe rred pursuant to
subsection C of Section 6-202 of this title. The report shall be
filed with the Governor, the President Pro Tempore of the Se nate,
the Speaker of the House of R epresentatives, the State Treasurer,
the State Auditor and Inspector, and the Director of the Office of
Management and Enterprise Services.
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SECTION 7. AMENDATORY 40 O.S. 2021, Section 6 -205, is
amended to read as follows:
Section 6-205.
TECHNOLOGY FUND BALANCE.
The balance of the OESC Technology Fund on Jul y 1 of any given
year shall be used in the calculation of conditional factors
pursuant to Section 3-113 of Title 40 of the Oklahoma Statutes this
title as long as the OESC Technology Fund has a balance greater than
zero (0).
The balance of the fund shall n ot exceed Twenty-five Million
Dollars ($25,000,000.00) prior to June 30, 2024, or be greater than
the calculated amount of Twenty -five Million Dollars
($25,000,000.00) plus the greater of the annual Consumer Price Index
rate for the State of Oklahoma for each subsequent year, as provided
by the Bureau of Labor Statistics, or three percent (3%) per annum
from that date forward. All funds in excess of these amount s shall
be transferred to the Unemployment Compensation Fund.
The calculation shall be conducted in the following manner: The
balance of the OESC Technology Fund as of July 1 of any given year
shall be aggregated with the balance of the Unemployment
Compensation Fund as of July 1 of the same year, with the resulting
sum to be used in the calculation of t he conditional factors as set
out in Section 3-113 of Title 40 of the Oklahoma Statutes this
title. The aggregate of the two fund balances shall only be for the
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purpose of the calculation and in no way shall balances in these two
funds be commingled.
SECTION 8. This act shall become effective November 1, 2023.
COMMITTEE REPORT BY: COMMITTEE ON BUSINESS AND COMMERCE
April 10, 2023 - DO PASS