H. B. 4087
(By Delegate Louisos)
[Introduced January 24, 2006; referred to the
Committee on Industry and Labor, Economic Development
and Small Business then the Judiciary.]
A BILL to amend and reenact §21A-5-16 of the Code of West Virginia,
1931, as amended; and to amend and reenact §23-2-5a of said
code, all relating to allowing the purchaser of at least fifty
percent of a business in default of payments, interest or
penalties for unemployment compensation and workers
compensation to recover from the owners or investors of the
business in default.
Be it enacted by the Legislature of West Virginia:
That §21A-5-16 of the Code of West Virginia, 1931, as amended,
be amended and reenacted; and that §23-2-5a of said code be amended
and reenacted, all to read as follows:
CHAPTER 21A. UNEMPLOYMENT COMPENSATION.
ARTICLE 5. EMPLOYER COVERAGE AND RESPONSIBILITY.
§21A-5-16. Collection of payments.
(a) The commissioner in the name of the state may commence a
civil action against an employer who, after due notice, defaults in
any payment, interest or penalty thereon required by this chapter.
Civil actions under this section shall be given preference on the
calendar of the court over all other civil actions except petitions
for judicial review under article seven of this chapter and cases
arising under the workers' compensation law. Upon prevailing in
any such civil action, the commissioner is entitled to recover
attorneys' fees and costs of action from the employer.
(b) Any payment, interest and penalty thereon due and unpaid
under this chapter is a debt due the state in favor of the
commissioner. It is a personal obligation of the employer
immediately due and owing and is, in addition thereto, a lien that
may be enforced as other judgment liens are enforced through the
provisions of chapter thirty-eight of this code and the same shall
be deemed by the circuit court to be a judgment lien for this
purpose against all the property of the employer: Provided, That
no such lien is enforceable as against a purchaser (including lien
creditor) of real estate or personal property for a valuable
consideration, without notice, unless docketed as provided in
article ten-c, chapter thirty-eight of this code.
(c) In addition to all other civil remedies prescribed herein
the commissioner may in the name of the state, after giving
appropriate notice as required by due process, distrain upon any personal property, including intangibles, of any employer
delinquent for any payment, interest and penalty thereon. If the
commissioner has good reason to believe that such property or a
substantial portion thereof is about to be removed from the county
in which it is situated, upon giving appropriate notice, either
before or after the seizure, as is proper in the circumstances, he
or she may likewise distrain in the name of the state before such
delinquency occurs. For purposes of effecting a distraint under
this subsection, the commissioner may require the services of a
sheriff of any county in the state in levying distress in the
county in which the sheriff is an officer and in which the
employer's personal property is situated. A sheriff so collecting
any payments, interest and penalties thereon is entitled to
compensation as provided by law for his or her services in the levy
and enforcement of executions. Upon prevailing in any distraint
action, the commissioner is entitled to recover his or her attorney
fees and costs of action from the employer.
(d) In case a business subject to the payments, interest and
penalties thereon imposed under this chapter is operated in
connection with a receivership or insolvency proceeding in any
state court in this state, the court under whose direction such
business is operated shall, by the entry of a proper order or
decree in the cause, make provision, so far as the assets in
administration will permit, for the regular payment of such payments as the same become due.
(e) The Secretary of State of this state shall withhold the
issuance of any certificate of dissolution or withdrawal in the
case of any corporation organized under the laws of this state, or
organized under the laws of another state and admitted to do
business in this state, until notified by the commissioner that all
payments, interest and penalties thereon against any such
corporation which is an employer under this chapter have been paid
or that provision satisfactory to the commissioner has been made
for payment.
(f) In any case where an employer defaults in payments,
interest or penalties thereon, for as many as two calendar
quarters, which quarters need not be consecutive, and remains
delinquent after due notice, the commissioner may bring action in
the circuit court of Kanawha County to enjoin that employer from
continuing to carry on the business in which such liability was
incurred: Provided, That the commissioner may as an alternative to
this action require such delinquent employer to file a bond in the
form prescribed by the commissioner with satisfactory surety in an
amount not less than fifty percent more than the payments, interest
and penalties due.
(g) Amounts of payments and penalties collected under this
section shall be deposited to the credit of the unemployment
compensation trust fund. Amounts of interest, attorneys' fees and costs collected under this section shall be paid into the
employment security special administration fund. Any such amounts
are not to be treated by the Auditor or Treasurer as part of the
general revenue of the state.
(h) Any purchaser of at least fifty percent of a business
having employees covered under the provisions of this chapter in
default, was in default at the time of purchase or may be found to
have been in default in the future may recover from the business
its owners or investors any payment, interest and penalty due by
filing a civil action against the former owner, or investors of the
business in default or that has defaulted or may be found to have
defaulted in the future in any payment required by this chapter or
law in effect at the time of the purchase. The purchaser is also
entitled to recover attorneys' fees and costs of the action. If the
contract of sale provides that the purchaser agrees to accept
liability for the default, the purchaser is precluded from
recovery.
CHAPTER 23. WORKERS' COMPENSATION.
ARTICLE 2. EMPLOYERS AND EMPLOYEES SUBJECT TO CHAPTER;
EXTRATERRITORIAL COVERAGE.
§23-2-5a. Collection of premiums from defaulting employers;
interest and penalties; civil remedies; creation
and enforcement of lien against employer and
purchaser; duty of Secretary of State to register liens; distraint powers; insolvency proceedings;
Secretary of State to withhold certificates of
dissolution; injunctive relief; bond; attorney fees
and costs.
(a) The Workers' Compensation Commission in the name of the
state may commence a civil action against an employer who, after
due notice, defaults in any payment required by this chapter. If
judgment is against the employer, the employer shall pay the costs
of the action. A civil action under this section shall be given
preference on the calendar of the court over all other civil
actions. Upon prevailing in a civil action, the commission is
entitled to recover its attorneys' fees and costs of action from
the employer.
(b) In addition to the provisions of subsection (a) of this
section, any payment, interest and penalty due and unpaid under
this chapter is a personal obligation of the employer immediately
due and owing to the commission and shall, in addition, be a lien
enforceable against all the property of the employer:
Provided,
That the lien shall not be enforceable as against a purchaser
(including a lien creditor) of real estate or personal property for
a valuable consideration without notice, unless docketed as
provided in section one, article ten-c, chapter thirty-eight of
this code:
Provided, however, That the lien may be enforced as
other judgment liens are enforced through the provisions of said chapter and the same is considered deemed by the circuit court to
be a judgment lien for this purpose.
(c) In addition to all other civil remedies prescribed, the
commission may in the name of the state, after giving appropriate
notice as required by due process, distrain upon any personal
property, including intangible property, of any employer delinquent
for any payment, interest and penalty thereon. If the commission
has good reason to believe that the property or a substantial
portion of the property is about to be removed from the county in
which it is situated, upon giving appropriate notice, either before
or after the seizure, as is proper in the circumstances, the
commission may likewise distrain in the name of the state before
the delinquency occurs. For that purpose, the commission may
require the services of a sheriff of any county in the state in
levying the distress in the county in which the sheriff is an
officer and in which the personal property is situated. A sheriff
collecting any payment, interest and penalty thereon is entitled to
the compensation as provided by law for his or her services in the
levy and enforcement of executions. Upon prevailing in any
distraint action, the commission is entitled to recover its
attorneys' fees and costs of action from the employer.
(d) In case a business subject to the payments, interest and
penalties thereon imposed under this chapter is operated in
connection with a receivership or insolvency proceeding in any state court in this state, the court under whose direction the
business is operated shall, by the entry of a proper order or
decree in the cause, make provisions, so far as the assets in
administration will permit, for the regular payment of the
payments, interest and penalties as they become due.
(e) The Secretary of State of this state shall withhold the
issuance of any certificate of dissolution or withdrawal in the
case of any corporation organized under the laws of this state or
organized under the laws of any other state and admitted to do
business in this state, until notified by the commission that all
payments, interest and penalties thereon against the corporation
which is an employer under this chapter have been paid or that
provision satisfactory to the commission has been made for payment.
(f) In any case when an employer required to subscribe to the
fund defaults in payments of premium, premium deposits, penalty or
interest thereon, for as many as two reporting periods, which
reporting periods need not be consecutive, and remains in default
after due notice, the commission may bring action in the circuit
court of Kanawha County to enjoin the employer from continuing to
carry on the business in which the liability was incurred:
Provided, That the commission may as an alternative to this action
require the delinquent employer to file a bond in the form
prescribed by the commission with satisfactory surety in an amount
not less than fifty percent more than the payments, interest and penalties due.
(g) Any purchaser of at least fifty percent of a business
having employees covered under the provisions of this chapter in
default, was in default at the time of purchase or may be found to
have been in default in the future may recover from the business
its owners or investors any payment, interest and penalty due by
filing a civil action against the former owner, or investors of the
business in default or that has defaulted or may be found to have
defaulted in the future in any payment required by this chapter or
law in effect at the time of the purchase. The purchaser is also
entitled to recover attorneys' fees and costs of the action. If
the contract of sale provides that the purchaser agrees to accept
liability for the default, the purchaser is precluded from
recovery.
NOTE: The purpose of this bill is to allow the purchaser of at
least fifty percent of a business in default of payments, interest
or penalties for unemployment compensation and workers'
compensation to recover from the owners or investors of the
business in default.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.