SB270 Alabama 2013 Session

Summary

Primary Sponsor

Clay Scofield

Republican

Co-Sponsor

J.T. Waggoner

Session

Regular Session 2013

Title

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

Summary

SB270 would redefine 'employing unit' for unemployment compensation in Alabama by adding a 65% ownership/assets threshold for acquisitions.

What This Bill Does

If an employer acquires at least 65% of an Alabama-based organization, its employees, or its assets (or a segregable part that would be subject to unemployment law), the acquiring entity becomes the employing unit responsible for Alabama unemployment compensation. The bill also covers cases where the acquired part or assets would, together with the new owner’s records in the same year, still constitute an employing unit, making the acquiring entity liable. Unemployment experience (the history used to set tax rates) and related rate calculations are transferred and recalculated to reflect the acquisition, with rules to determine proper rate assignment. There are penalties for attempting to exploit the system to obtain a lower rate, including possible high tax rates or civil penalties, and procedures to identify such transfers.

Who It Affects

• Purchasing employers: those who acquire at least 65% of an Alabama-based organization or its assets would be treated as the employing unit for unemployment compensation, affecting their tax obligations and rate determinations.
• Employees of acquiring/acquired firms: their employer’s unemployment tax rate and the handling of unemployment-claims experience may change because the employing unit and its experience could transfer to the new owner.

Key Provisions

• Adds a 65% threshold: an acquiring employer becomes the employing unit if it acquires at least 65% of the Alabama organization, or substantially all its assets, or a segregable part that would be subject to the act if it were the whole organization.
• Extends applicability to cases where the acquired part/assets would, with the acquiring entity’s records in the same calendar year, constitute an employing unit in the state.
• Transfers unemployment experience to the acquiring employer upon acquisition and recalculates tax rates accordingly, with objective factors to determine if the acquisition was sought to obtain a lower rate.
• Imposes penalties for violations or attempted violations of the rate assignment provisions and provides procedures to identify transfers, with penalties including high rates or civil penalties; effective date set for the first day of the third month after gubernatorial approval.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Unemployment Compensation