Section 8 AAC 85.260 - Provision of bond or other security(a) A nonprofit organization, government entity, federally recognized tribe or group of nonprofit organizations, government entities, or federally recognized tribes, 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 bond or deposit is filed with the department. The department will only accept the bond or deposit if the amount of the bond or deposit is the larger of $32,000 or 3.2 percent of total wages paid for employment in the four most recently reported calendar quarters immediately preceding the effective date of the election. If the employer did not pay wages in the four quarters preceding the effective date of the election, the director shall estimate the 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 under each of the following conditions: (1) the bond must remain enforceable and in effect for three years after any reimbursing employer ceases to be an employer or terminates its reimbursable status; (2) cancellation of the bond may not go into effect until 90 days after the department receives notification from the surety company of its intention to cancel the surety bond;(3) a cancellation does not affect any liability of the surety or the employer incurred or accrued on benefits paid during the effective period under (1) of this subsection. (c) If the employer 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 the employer in writing if a bond must be increased under (a) of this section. The employer shall file the adjusted bond within 30 days after the notice is mailed or otherwise delivered to the employer.(e) The director shall hold money or securities deposited 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 under (a) of this section 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 escrow account of the employer.(g) The director may at any time review the adequacy of a deposit made by an employer. The director shall notify the employer in writing if an additional deposit is necessary under (a) or (d) of this section. The employer shall deposit the additional money or securities within 30 days after the notice is mailed or otherwise delivered. The director may refund that portion of the deposit that exceeds the amount required under this section.(h) The director shall terminate an election under AS 23.20.277 if an employer fails to meet the requirements of this section and AS 23.20.277. The termination continues until the requirements of AS 23.20.277 have been met and for the remainder of the current and following taxable year. The director shall provide at least 30 days to meet the requirements of this section and AS 23.20.277 following written notice of intention to terminate the election.(i) The director may for good cause beyond the control of the employer extend a filing, deposit, or adjustment period under this section by not more than 60 days.(j) The state or any of its instrumentalities or any political subdivision of this state or any of its instrumentalities or one or more other states or political subdivisions or instrumentalities with the authority to levy a tax or special assessment and impose a lien for its enforcement under state law 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 may grant the request if the employer is not delinquent in its payments of the fund and if the payments do not appear to be in jeopardy.Eff. 1/13/72, Register 40; am 11/5/74, Register 52; am 12/5/79, Register 72; am 10/12/97, Register 144; am 12/5/2009, Register 192; am 6/27/2014, Register 210, July 2014Authority:AS 23.20.045
AS 23.20.277
AS 23.20.278
AS 23.20.520