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(a) A nonprofit organization electing under AS 23.20.277 to reimburse the fund for benefits paid to its employees shall file a surety bond with the department or shall deposit money or securities with the department. An election is not effective until a nonprofit organization files the bond or makes the deposit. The department will only accept the bond or deposit if the amount of the bond or deposit is the larger of $10,000 or one percent of total wages paid by the nonprofit organization for employment in the four calendar quarters immediately preceding the effective date of the election. If the nonprofit organization did not pay wages in the four quarters preceding the effective date of the election, the director shall estimate the nonprofit organization's payroll for four quarters using the most recent and applicable information.
(b) The department will only accept a surety bond under (a) of this section,
(1) if the bond remains in effect until cancelled only by action of the surety, the principal, or the department; and
(2) an action may not be commenced upon the bond more than three years after its cancellation.
(c) If a nonprofit organization covered by a bond fails to pay the full amount of payments in place of contributions when due, together with any applicable interest and penalties under AS 23.20.185 - 23.20.195, the department will pursue the surety for liability on the bond.
(d) The director shall notify a nonprofit organization in writing if a bond must be increased under (a) of this section. The nonprofit organization shall file the adjusted bond within 30 days after the notice is mailed or otherwise delivered to the nonprofit organization.
(e) The director shall hold money or securities deposited by a nonprofit organization under (a) of this section in an escrow account until all liability for benefits under the election is terminated. When liability is terminated, the director shall return the deposit, less any deductions made under (f) of this section.
(f) The director may deduct from money, or sell securities, deposited by a nonprofit organization to satisfy delinquent payments in lieu of contributions, including interest and penalties. After the delinquency is satisfied from the sale of securities, the director shall deposit remaining cash to the nonprofit organization's escrow account.
(g) The director may at any time review the adequacy of a deposit made by a nonprofit organization. The director shall notify the nonprofit organization in writing if an additional deposit is necessary under (a) or (d) of this section. The nonprofit organization shall deposit the additional money or securities within 30 days after the notice is mailed or otherwise delivered to the nonprofit organization. The director shall refund that portion of the deposit that exceeds the amount required under this section.
(h) The director may terminate a nonprofit organization's election under AS 23.20.277 if the nonprofit organization fails to meet the requirements of this section and AS 23.20.277 . The termination must continue for at least four consecutive calendar quarters beginning with the quarter in which the termination becomes effective. The director shall give a nonprofit organization at least 30 days to meet the requirements of this section and AS 23.20.277 following written notice of intention to terminate the nonprofit organization's election.
(i) The director may for good cause beyond the control of the nonprofit organization extend a filing, deposit, or adjustment period under this section by not more than 30 days.
(j) A government entity that elects payments in place of contributions under AS 23.20.277 may request in writing a waiver of the bond or deposit requirement. The director shall grant the request if the government entity is not delinquent in its payments of the fund and if the payments do not appear to be in jeopardy.
History: Eff. 1/13/72, Register 40; am 11/5/74, Register 52; am 12/5/79, Register 72; am 10/12/97, Register 144
Authority: AS 23.20.045
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Last modified 7/05/2006