(2)__If the person is not an employer, that person is subject to a fine of not more than $5,000, which must be deposited in the Special Administrative Expense Fund established under section 1164.

D.__As used in this subsection, unless the context otherwise indicates, the following terms have the following meanings.

(1)__"Knowingly" means having actual knowledge of or acting with deliberate ignorance or reckless disregard for the prohibition involved.

(2) "Person" has the meaning given that term by Section 7701(a)(1) of the Internal Revenue Code of 1986.

(3) "Trade or business" includes the employer's workforce.

(4)__"Violates or attempts to violate" includes, but is not limited to, intent to evade, misrepresentation or willful nondisclosure.

E.__The commissioner shall adopt rules to identify the transfer or acquisition of a business for purposes of this subsection.__Rules adopted pursuant to this paragraph are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A.

F.__This subsection must be interpreted and applied in such a manner as to meet the minimum requirements contained in any guidance or regulations issued by the United States Department of Labor.

SUMMARY

The purpose of this bill is to help detect businesses with high unemployment insurance tax rates resulting from a high volume of layoff activity setting up shell companies and transferring their employees to the shell companies to get lower, new-employer unemployment insurance tax rates and deters those businesses from doing so. Federal legislation to address this type of unemployment tax rate manipulation was recently enacted, and this bill is designed to keep Maine law in compliance with federal law.