A. The legislature finds that:
(1) the state of New Mexico recognizes and respects the Indian tribes and pueblos as governments that possess the inherent right of self-government;
(2) under the Federal Unemployment Tax Act, federal law now expressly exempts Indian tribes and requires that state law provide that an Indian tribe may elect to make contributions for employment or make reimbursable payments in lieu of contributions; and
(3) in order to comply with the change in federal law, state law must be amended to provide for the treatment of Indian tribes under the state unemployment insurance system.
B. Benefits based on service in employment of an Indian tribe, tribal unit or a subdivision, subsidiary or business enterprise wholly owned by a tribe shall be payable in the same amount, on the same terms and subject to the same conditions as benefits payable on the basis of other service in employment for other employers pursuant to the Unemployment Compensation Law.
C. An Indian tribe, tribal unit or a subdivision, subsidiary or business enterprise wholly owned by a tribe may make contributions in the same manner and under the same conditions as other employers or may elect to reimburse the fund with payments equal to the amounts of benefits attributable to service in the employ of the tribe, unit, subdivision, subsidiary or enterprise.
D. If an Indian tribe, tribal unit or a subdivision, subsidiary or business enterprise wholly owned by a tribe elects to make payments in lieu of contributions, the following provisions shall apply:
(1) as used in this section, "electing entity" means a tribe, tribal unit or a subdivision, subsidiary or business enterprise, wholly owned by a tribe, that elects to make payments in lieu of contributions. The tribe as a whole may be an electing entity or an individual tribal unit, subdivision, subsidiary or enterprise, or a combination of these may be electing entities;
(2) an electing entity may elect to make payments in lieu of contributions by filing a written notice of its election with the division not later than thirty days prior to the beginning of the taxable year for which its election shall first be effective; except that, if an election is made prior to July 1, 2001, at the option of the electing entity the election shall be deemed to be effective December 21, 2000 or January 1, 2001; and
(3) once an election is made, payments in lieu of contributions will be used by the electing entity for the following two taxable years.
E. The following provisions apply to payments in lieu of contributions made by an electing entity:
(1) at the end of each calendar quarter, the division shall bill each electing entity for an amount calculated pursuant to this subsection; except that, in calculating the initial payments due for an electing entity that has made an election prior to July 1, 2001, the secretary shall bill the electing entity for the period elapsed since December 21, 2000;
(2) each calendar quarter, each electing entity making payments in lieu of contributions shall pay to the division an amount equal to twenty-five percent of the total benefit charges made to the electing entity during the four calendar quarters ending the preceding June 30. The due date for the payments shall be the tenth day of the first month of each calendar quarter;
(3) in the event that an electing entity making payments in lieu of contributions incurred no benefit charges during the four calendar quarters ending the preceding June 30, the electing entity shall pay to the division, each calendar quarter, an amount equal to one-eighth of one percent of the electing entity's annual taxable wages paid for such period for employment as estimated by the secretary. The due date for the payments shall be the tenth day of the first month of the calendar quarter;
(4) for each calendar quarter, the secretary shall determine the amount paid by each electing entity subject to payment in lieu of contributions and the amount of benefits charged to the electing entity's account; provided that an electing entity shall not be relieved of charges for benefits paid to an individual who was separated from the employ of that electing entity for any reason. Each electing entity who has made payments in an amount less than the amount of benefits charged to the electing entity's account shall pay the balance of the amount charged within twenty-five days of the notification by the division. If the quarterly payment made by an electing entity pursuant to Paragraph (2) or (3) of this subsection exceeds the amount of benefits charged to the electing entity's account, the excess payment shall be refunded on a quarterly basis;
(5) payments made by an electing entity pursuant to the provisions of this subsection shall not be deducted or deductible, in whole or in part, from the remuneration of individuals in the employ of the electing entity;
(6) two or more electing entities may file a joint application for the establishment of a group account for the purpose of sharing the cost of benefits paid that are attributable to service in the employ of the entities. The application shall identify and authorize a group representative to act as the group's agent for the purpose of this paragraph. Upon its approval of the application, the division shall establish a group account for the electing entities effective as of the beginning of the calendar quarter in which it receives the application and shall notify the group's representative of the effective date of the account. The account shall remain in effect for not less than two years and thereafter until terminated at the discretion of the secretary or upon application by the group. Each group account shall be liable for the prepayment of payments in lieu of contributions as provided in Paragraphs (2), (3) and (4) of this subsection. Each member of the group account shall be liable to the division for payments in lieu of contributions with respect to each calendar quarter in the amount that bears the same ratio to the total benefits paid in the quarter that are attributable to service performed in the employ of all members of the group as the total wages paid for service in employment for such member during the quarter bear to the total wages paid during the quarter for service performed in the employ of all members of the group. The secretary shall prescribe rules as he deems necessary with respect to applications for establishment, maintenance and termination of group accounts that are authorized by this paragraph, for addition of new members to, and withdrawal of active members from, the accounts and for the determination of the amounts that are payable under this subsection by members of the group and the time and manner of payments. Each group account may apportion liability for amounts due to the group representative as the group shall determine; and
(7) past-due payments in lieu of contributions are subject to the same penalties that are applied to past-due contributions under Section 51-1-12 NMSA 1978.
F. Contributions or payments in lieu of contributions unpaid on the date on which they are due and payable shall bear interest at the rate of one percent per month from and after such date until payment is received by the division. Interest collected pursuant to this subsection shall be paid into the employment security department fund.
G. Any person, group of individuals, partnership or employing unit that acquires the organization, trade or business or substantially all the assets thereof from an Indian tribe or tribal entity shall notify the division in writing by registered mail not later than five days prior to the acquisition. Unless such notice is given, such acquisition shall be void as against the division, if, at the time of the acquisition, any contributions or payments in lieu of contributions are due and unpaid by the tribe or tribal entity, and the assets so acquired shall, if otherwise allowed by law, be subject to attachment for the debt.
H. If an Indian tribe or a tribal entity fails to make a contribution or payment in lieu of contribution pursuant to the Unemployment Compensation Law, the division shall mail a notice of nonpayment or delinquency to the noncomplying tribe or tribal entity at its last known address as shown in division records. If the payment is not made within ninety days of the date the notice is mailed, the account of the noncomplying tribe or tribal entity shall be terminated. Notice of the termination shall be mailed to the tribe or tribal entity at its last known address shown in division records. The notice shall be accompanied by a written description of protest rights pursuant to Section 51-1-8 NMSA 1978. Termination of an account pursuant to this subsection terminates the tribe or tribal entity's participation as a contributing employer.
I. The secretary may reinstate the account of an Indian tribe or tribal entity that loses coverage pursuant to Subsection H of this section if the tribe or the tribal entity pays all contributions, payments in lieu of contributions, interest, penalties, surcharges and fees that are due and owing.
J. If an Indian tribe or tribal entity fails to make contributions or payments in lieu of contributions pursuant to this section, including any assessed interest and penalties, within ninety days of a notice of nonpayment or delinquency, the secretary shall immediately notify the United States internal revenue service and the United States department of labor.
K. Notices of payment and reporting delinquency to an Indian tribe or a tribal entity shall include an explanation that failure to make full payment within the prescribed time will cause the tribe or the tribal entity to:
(1) be liable for taxes pursuant to the Federal Unemployment Tax Act;
(2) lose the option to make payments in lieu of contributions; and
(3) lose its status as an employer under the Unemployment Compensation Law and will cause services performed for the tribe or tribal entity to not be treated as "employment" under that law.
L. Extended benefits paid that are attributable to service in the employ of an Indian tribe or tribal entity and not reimbursed by the federal government shall be the responsibility of the Indian tribe or tribal entity.
M. Nothing in this section shall be deemed to be a waiver of tribal sovereignty or sovereign immunity, either directly or indirectly. Compliance by an Indian tribe or tribal entity with the provisions of this section shall not be deemed to directly or indirectly waive tribal sovereignty or sovereign immunity.
History: 1978 Comp., § 51-1-59, enacted by Laws 2001, ch. 249, § 3.
ANNOTATIONSCross references. — For the Federal Unemployment Tax Act, see 26 U.S.C. § 3301 et seq.
Effective dates. — Laws 2001, ch. 249 contained no effective date provision, but, pursuant to N.M. Const., art. IV, § 23, was effective June 15, 2001, 90 days after adjournment of the legislature.
Temporary provisions. — Laws 2001, ch. 249, § 4 provided that the labor department shall waive any unpaid contributions, including interest and penalties, from an Indian tribe, tribal unit or a subdivision, subsidiary or business enterprise wholly owned by a tribe due between January 1, 2000 and December 21, 2000 if, before January 31, 2004, the tribe, tribal unit or subdivision, subsidiary or business enterprise pays to the unemployment compensation fund an amount equal to the total benefits actually paid from the fund between January 1, 2000 and December 21, 2000 to the employees of that tribe, tribal unit or subdivision, subsidiary or business enterprise.