HB426 Alabama 2013 Session

Summary

Primary Sponsor

Wes Long

Republican

Session

Regular Session 2013

Title

Unemployment compensation, employing unit defined, Sec. 25-4-8 am'd.

Summary

HB426 would expand who counts as an 'employing unit' for unemployment compensation by adding a 65 percent ownership/asset threshold for Alabama-based acquisitions.

What This Bill Does

This bill adds a new rule that if an employer acquires at least 65% of an Alabama-based organization, trade, employees, or business (or substantially all assets), the acquirer becomes an employing unit under unemployment compensation. It also covers acquiring a segregable part and scenarios where merged entities would be subject to the chapter. When such an acquisition happens, the unemployment experience can be transferred to the new employer and tax rates adjusted accordingly. The bill also sets penalties for knowingly violating the transfer/rate rules and requires procedures to identify such transfers, with an effective date a few months after passage.

Who It Affects

• Employers planning or completing acquisitions of Alabama-based organizations or assets (65% threshold) who would become subject to unemployment compensation and may see their unemployment tax rate and experience history affected.
• Employers who knowingly violate the transfer/rate rules or attempt to acquire to obtain a lower tax rate, who would face penalties including the highest rate for several years, civil penalties, and potential felony charges.

Key Provisions

• Adds a new criterion: an employing unit includes any entity that acquires at least 65 percent of a Alabama-based organization, trade, employees, or business (or substantially all assets) and would otherwise be subject to the unemployment tax law.
• Also allows acquisition of a segregable part to trigger the employing unit status if that part would itself be subject to the chapter when established.
• If such an acquisition would make the combined entity subject to the chapter, unemployment experience is transferable to the acquirer and tax rates are recalculated accordingly.
• Establishes penalties for knowingly violating rate-transfer provisions, including the highest assignable rate for the tax year and the next three years (or, if already at the top rate, a higher penalty rate), plus civil penalties for non-employers and potential felony prosecution.
• Directs the state director to create procedures to identify transfers or acquisitions for this purpose and specifies the act’s effective date as the first day of the third month after passage and Governor approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Unemployment Compensation