HB407: Virginia Public Procurement Act; failure to pay unemployment taxes.
HOUSE BILL NO. 407
Be it enacted by the General Assembly of Virginia:
1. That § 2.2-4321.1 of the Code of Virginia is amended and reenacted and that the Code of Virginia is amended by adding a section numbered 2.2-4321.3 as follows:
§ 2.2-4321.1. Prohibited contracts; exceptions; determination by Department of Taxation; appeal; remedies.
A. No state agency shall contract for goods or services with a
nongovernmental source if the source, or any affiliate of the source, is
subject to the provisions of (i) § 58.1-612 and fails or refuses to collect and
remit the tax on its sales delivered by any means to locations within the
Commonwealth or; (ii) Article 2 (§ 58.1-320 et
seq.) or Article 10 (§ 58.1-400 et
seq.) of Chapter 3 of Title 58.1 and fails or refuses to remit any tax due
thereunder; or (iii) Article 1 (§ 60.2-500 et seq.), 2 (§
60.2-511 et seq.), 3 (§ 60.2-519 et seq.),
or 4 (§ 60.2-525 et seq.) of Chapter 5 of Title 60.2 and fails or refuses to
remit any tax due thereunder. The provisions of clause (ii)
shall not apply to any person that has (a) entered into a payment agreement
with the Department of Taxation to pay the tax and is not delinquent under the
terms of the agreement or (b) appealed the assessment of the tax in accordance
with law and such appeal is pending. The provisions of
clause (iii) shall not apply to any person that has (1) entered into a payment
agreement with the Virginia Employment Commission to pay the tax and is not
delinquent under the terms of the agreement or (2) appealed the assessment of
the tax in accordance with law and such appeal is pending.
B. A state agency may contract for goods or services with a source prohibited under subsection A in the event of an emergency or where the nongovernmental source is the sole source of such goods or services.
C. The determination of whether a source is a prohibited source under clause (i) or (ii) of subsection A shall be made by the Department of Taxation after providing the prohibited source with notice and an opportunity to respond to the proposed determination. The determination of whether a source is a prohibited source under clause (iii) of subsection A shall be made by the Virginia Employment Commission after providing the prohibited source with notice and an opportunity to respond to the proposed determination. The Department of Taxation or the Virginia Employment Commission shall notify the Department of General Services of its determination.
D. The Department of General Services shall post public notice of all
prohibited sources on its public internet
procurement website and on other appropriate websites the secure portal of the Commonwealth's statewide
electronic procurement system,
known as eVA, which is accessible with buyer login credentials.
E. The remedies provided in Article 5 (§ 2.2-4357 et seq.) of this chapter shall not
apply to any determination made pursuant to this section and the sole remedy
for any adverse determination shall be as provided in subsection F.
F. Any source aggrieved by a determination of the Department
of Taxation made under this section subsection C may apply to the
Tax Commissioner for correction of the determination,
and any source aggrieved by a determination of the Virginia Employment
Commission under subsection C may apply to the Commissioner of the Virginia
Employment Commission for correction of the determination.
The Tax Commissioner or Commissioner of
the Virginia Employment Commission shall respond within 30
days of receipt of the application for corrective action. Within 10 days after
receipt of the Tax Commissioner's response or
Commissioner of the Virginia Employment Commission's response, as applicable,
the aggrieved source may appeal to the Circuit Court for the City of Richmond.
If it is determined that the determination of the Department of Taxation or Virginia Employment Commission
was arbitrary, capricious, or not in accordance with law, the sole relief shall
be restoration of the source's eligibility to contract with state agencies. No
claim for damages or attorney's attorney fees shall be
awarded.
G. Any action of the Department of Taxation, the Virginia Employment Commission, the Department of General Services, or of any state agency under this section shall be exempt from the provisions of the Administrative Process Act (§ 2.2-4000 et seq.).
H. For the purposes of this section, "state agency"
means any authority, board, department, instrumentality, institution, agency, or other unit of state
government. State agency shall does not include any public
institution of higher education or; any county, city, or town;
or any local or regional governmental authority.
§ 2.2-4321.3. Failure to remit taxes due under Title 60.2.
Any nongovernmental source that fails to remit taxes due under Article 1 (§ 60.2-500 et seq.), 2 (§ 60.2-511 et seq.), 3 (§ 60.2-519 et seq.), or 4 (§ 60.2-525 et seq.) of Chapter 5 of Title 60.2 for more than 10 covered employees shall be a prohibited source under § 2.2-4321.1 for a period of two years.