The plaintiff, United Aircraft Corporation, an employer subject to the Unemployment Compensation Act, seeks to recover alleged overpayments in its contribution to the unemployment compensation fund. It is the plaintiff's claim that the defendant's predecessor, the administrator of the Unemployment Compensation Act of the state of Connecticut, erroneously interpreted and applied § 31-226 of the General Statutes, Revision of 1958,
At the request of the parties, the case was reserved pursuant to General Statutes § 62-235 for the advice of this court and for an answer to each of nine questions. Only those questions we find relevant to a disposition of this case are set forth in the footnote.
The facts as contained in the stipulation between the parties, and the summary of facts in the plaintiff's brief which are not in dispute, may be stated as follows: The plaintiff is a Delaware corporation with an office and principal place of business in East Hartford, Connecticut. During the years 1968 and 1969 it was subject to the provisions of the Connecticut
Each employer subject to the unemployment compensation law is required under § 31-225 (a) to pay a tax equal to 2.7 percent of the wages paid. by it with respect to employment,
Section 31-226 (b) provides that the defendant then divide the total of the experience payrolls of all employers with a merit rating index into thirteen approximately equal parts, with the first of these parts consisting of the experience payrolls of those
The statute sets forth a tax table establishing the contribution rate applicable to employers in each of the thirteen parts. The portion of this table applicable for the years 1968 and 1969 is as follows:
MERIT RATING PART RATE 1 2.7% 2 2.55 3 2.4 4 2.25 5 2.1 6 1.95 7 1.8 8 1.65 9 1.5 10 1.35 11 1.2 12 1.05 13 .9
In 1968 the total experience payroll of all employers under the plan was $7,727,645,871. To arrive at thirteen approximately equal parts, the defendant first divided the total payroll into thirteen exactly equal parts, with each part containing
In 1968, the plaintiff's experience payroll was $658,195,373. After dividing the total of the experience payrolls into thirteen approximately equal parts, the plaintiff's experience payroll would have been spread among merit ratings nine, ten, and eleven, falling into the merit rating parts as follows:
AMOUNT OF MERIT RATING PLAINTIFF'S PAYROLL CONTRIBUTION PART IN THE PART RATE 9 $ 63,746,940 1.5% 10 594,434,298 1.35 11 14,134 1.2
Pursuant to General Statutes § 31,226 (b) (4), the defendant allocated the entire experience payroll of the plaintiff to merit rating nine, thus requiring the plaintiff to pay the contribution rate of 1.5 percent, the highest of the three rates for the parts into which the payroll fell. In taxing the plaintiff in this manner no payroll of any employer was allocated to
In the year 1969, the total experience payrolls of all employers with a merit rating index was $8,354,563,157 and this was divided into thirteen approximately equal parts of $642,658,704. The plaintiff's total experience payroll for 1969 was $749,040,786. The payrolls were assigned to the thirteen parts based on the employer's merit rating index and the plaintiff's payroll, once again, fell among parts nine, ten and eleven as follows:
AMOUNT OF MERIT RATING PLAINTIFF'S PAYROLL CONTRIBUTION PART IN THE PART RATE 9 $ 90,539,151 1.5% 10 642,658,704 1.35 11 15,842,931 1.2
The defendant then allocated the plaintiff's entire payroll to part nine and taxed the entire experience payroll at 1.5 percent. As was the case in 1968, no payroll was allocated to merit rating part ten because the plaintiff's payroll exceeded one part and took up all of category ten.
The plaintiff duly notified the defendant of its claim that he had erred in his interpretation of § 31-226 (b) for the purpose of determining the contribution rate for the plaintiff for the years 1968 and 1969. The plaintiff requested that the defendant correct the allocation made with respect to its experience payroll for 1968 and 1969 and refund to the plaintiff the amounts by which it had overpaid the taxes. The defendant refused to alter the allocation made under § 31-226 (b), or to refund to the plaintiff any alleged overpayment.
The Unemployment Compensation Act was first enacted at a special session of the General Assembly in 1936. The particular provision before us was added as an amendment in 1939, § 1337e, and appears in the 1939 Supplement to the 1930 Revision of the General Statutes. The primary purpose of the act is to relieve the distress of unemployment; it is remedial in character; and it is to be liberally construed. New Haven Market Exchange, Inc. v. Administrator, 139 Conn. 709, 712, 97 A.2d 262.
When § 31-226 (b) (4) of the act was enacted in 1939 no single employer was large enough so that its experience payroll was likely to be divided among more than two parts. The statutory language in question is clear and describes a specifically delineated procedure which admits of no ambiguities. We cannot "search out some intent which we may believe the legislature actually had and give effect to it,... we are confined to the intention which is expressed in the words it has used." Connecticut Light & Power Co. v. Walsh, 134 Conn. 295, 301, 57 A.2d 128. The intention of the legislature, expressed in the language it uses, is the controlling factor and the application of common sense to the language is not
The defendant is required to compute the tax liability for each of several thousand employers subject to the unemployment compensation law in accordance with standards and procedures set forth in General Statutes § 31-226. The establishment of the plaintiff's rates for the years in question affected the establishment of the rates of contribution of the other employers subject to the provisions of the act. A reading of the statutes makes it readily apparent that the legislature was aware of the complicated and technical nature of the method for fixing the rates of contribution to the fund. The tax or contribution is based on the balance in the trust fund and the employers' employee turnover experience. Most of the employers' payrolls fall into one of the thirteen parts; some payrolls spread into two. Section 31-226 (b) (4) in effect in 1968 and 1969 expressly provided for this eventuality so that the whole payroll, in such a case, must be placed in the lower part, which imposes the higher tax. For the first time in the history of the unemployment compensation law, however, the plaintiff's payroll spread over three parts in 1968 and 1969.
The defendant, as administrator of the act, is
Section 31-226 (b) (4) does not specifically describe the situation where an employer's payroll falls into three merit rating parts and there are three possible tax rates. It would apply, however, in
The only express provision that the statute lacked was a specific instruction as to where to place an employer's payroll which spreads among more than two parts. The express provision when the payroll spread over two parts which had been used in the past provided for an acceptable, uniform and workable standard in administration and tax computation even though its practical effect results in circumstances in which the thirteen parts are no longer equal. See Muller v. Town Plan & Zoning Commission, 145 Conn. 325, 331, 142 A.2d 524; Allen Mfg. Co. v. Administrator, supra, 412. In such a case the wisdom of the above result is not a matter for consideration by this court. Taxation is "eminently. practical." United States v. Jacobs, 306 U.S. 363, 370, 59 S.Ct. 551, 83 L. Ed. 763. The court cannot read something into a statute to reach a just result nor can it substitute its judgment of what would constitute a wiser provision for the clearly expressed intent of the legislature. Dental Commission v. Tru-Fit Plastics, Inc., 159 Conn. 362, 365, 269 A.2d 265. In such a case the administrator must follow the statutory directive as closely as possible, consistent with the clear intent of the law, so as to afford employers similarly circumstanced equal protection of the law. Statutes relating to taxation are not penal, nor in derogation of natural right, and are to be so construed as to carry into effect the obvious intent of the legislature. Cornwall v. Todd, 38 Conn. 443, 447. Had the plaintiff's payroll fallen into all or a portion of the ninth part and all of the tenth part, with no portion in the eleventh part, the allocation of the entire payroll to the ninth part
Since § 31-226 (b) (4) does apply to the plaintiff's payroll for the years 1968 and 1969, and the plaintiff's payroll did fall between merit rating parts nine and ten, the portion of the plaintiff's payroll falling into merit rating part ten must be placed in merit rating part nine and taxed at the corresponding rate pursuant to the statute.
The portion of the plaintiff's payroll falling into merit rating eleven in 1968 and 1969 should remain therein and be taxed at the corresponding rate of 1.2
Since subsection (b) (4) does not apply to the portion of the plaintiff's payroll falling into merit rating part eleven, the commissioner was without authority in placing that portion of the payroll into merit rating nine. The administrator cannot act beyond the statutory scheme by which he is empowered to act. Hammerberg v. Holloway, 131 Conn. 616, 621, 41 A.2d 771; DeFlumeri v. Sunderland, 109 Conn. 583, 585, 145 A. 48. The portion of the plaintiff's payroll falling into merit rating eleven in 1968 and 1969, therefore, was unaffected by subsection (b) (4) and must remain taxable at the rate determined by the initial division of the experience payroll into thirteen parts as determined by § 31-226 (b) (1).
The Unemployment Compensation Act pursuant to
The answer to questions one and four propounded in the reservation is that the portion of the plaintiff's payroll falling into merit rating parts nine and ten for the years 1968 and 1969 was properly placed in merit rating part nine and taxed at 1.5 percent; that portion of the plaintiff's payroll falling into merit
No costs will be taxed in this court in favor of either party.
In this opinion the other judges concurred.
"2. If the answer to question 1 is `No,' should the plaintiff's experience payroll for each of the years 1968 and 1969 be allocated, for purposes of determining the tax or contribution rate of such employer under Chapter 567 of the General Statutes of Connecticut, Revision of 1958, as amended, so that the total of the experience payrolls of all eligible employers, is divided (i) into thirteen parts, (ii) into thirteen parts which are approximately equal, and (iii) in a manner such that the experience payrolls of all eligible employers with a merit rating index lower than the plaintiff are allocated to parts with a higher tax or contribution rate, Parts 1 through 9, and the experience payrolls of all eligible employers with a merit rating index higher than the plaintiff axe allocated to parts with a lower tax or contribution rate, Parts 11 through 13, and plaintiff's experience payroll is allocated to Part 10?
"3. If the answer to question 2 is `No,' should the plaintiff's experience payroll for each of the years 1968 and 1969 be allocated, for purposes of determining the tax or contribution rate of such employer under Chapter 567 of the General Statutes of Connecticut, Revision of 1958, as amended, to each of the three parts among which such experience payroll is spread upon division of the total of the experience payroll of all eligible employers into thirteen exactly equal parts?
"4. Is the plaintiff entitled to a refund of tax, with interest thereon, for the calendar years 1968 and 1969,
. . . . .
"7. Was the defendant correct in construing the phrase "between two of the parts' used in Section 31-226 of the General Statutes of Connecticut, Revision of 1958, as amended, as if it read among two or more of the parts, and was the defendant correct in construing the word `lower' in the same statute, as if it read `lowest',
"8. Would the following alternative method of computing the plaintiff's tax or contribution rate be within the provisions of Chapter 567 of the General Statutes of Connecticut, Revision of 1958, as amended, under the facts of this ease: When the plaintiff's entire experience payroll is divided among three parts it is to be placed into only two parts, placing "that portion of the payroll falling in Part 10 into Part 9, and that falling into Part 11 into Part 10?"
"[General Statutes] Sec. 31-226. MERIT RATING INDEXES. (a) If, on June thirtieth of any year, the balance in the unemployment compensation fund is at least one and one-quarter per cent of the three-year payroll, the administrator shall compute a merit rating index for each eligible employer with respect to the whole of the three-year period ending on such June thirtieth, hereinafter called the experience period. An eligible employer shall be one who has been subject to this chapter for the three-year period ending on such June thirtieth except that an employer who has not been subject to this chapter for a period of three years shall be deemed to have met this requirement if he has been subject to this chapter for a period of at least one year ending on June thirtieth and who on the following September thirtieth has filed all required contribution reports and has paid contributions on all wages so reported, and has paid any other contributions assessed against him, unless an appeal from such assessment has been taken or the time for such appeal has not yet expired. As used in this chapter, an employer's `experience payroll' means the aggregate amount of wages reported by such employer during the whole number of years within such experience period, including only wages with respect to which contributions have been paid or are payable, during which such employer has been subject to this chapter. An employer's merit rating index shall be the quotient obtained by dividing his experience payroll by the rated amount of the compensable separations which, in accordance with subsection (c) of this section, have been charged against his merit rating account during the experience period. The `rated amount' of a compensable separation shall be the total unemployment benefit rate of the individual.
"(b) ADJUSTMENT OF CONTRIBUTION RATES. As of each June thirtieth as of which merit rating indexes are computed, in accordance with subsection (a) of this section, the total of the experience payrolls of all employers for whom merit rating indexes are computed shall be divided into thirteen approximately equal parts, such that (1) the first of such parts shall consist of the experience payrolls of employers with the lowest merit rating indexes, except that when the balance in the unemployment compensation fund is three and one-half per cent or more of the three-year payroll no employer whose merit rating index is four hundred or higher shall be included in the first part, the experience payroll of any employer affected by this exception to be placed in the second part, (2) the thirteenth of such parts shall consist of the experience payrolls of employers with the highest merit rating indexes, (3) any other given part shall consist of the experience payrolls of employers whose merit rating indexes are lower than the merit rating indexes of all employers whose experience payrolls are included in any higher numbered part, but are higher than the merit rating indexes of all employers whose experience payrolls are included in any lower numbered part and, (4) if a division of the aforesaid total of the experience payrolls into thirteen exactly equal parts would require that an employer's payroll be divided between two of the parts, his payroll shall be included in the lower numbered of such two parts. Each employer's rate of contribution oa wages paid by him during the twelve calendar months commencing on the January first next following the end of the experience period shall be in accordance with the following table, instead of that specified in subsection (a) of section 31-225, except that any employer entitled to merit rating who has had no compensable separations charged against his merit rating account during the experience period shall be entitled to the contribution rate assigned to the thirteenth part: ...."
"[General Statutes] Sec. 31-269. REFUNDS AND DEFICIENCIES. If more or less than the correct amount of contributions imposed has been paid with respect to employment during any period and if such overpayment or underpayment cannot be or is not adjusted under section 31-268, the amount of the overpayment shall be refunded to the employer from the contribution account of the unemployment compensation fund or the amount of the underpayment shall be paid by the employer to the administrator at such time as the administrator prescribes, provided no refund shall be made unless request has been made within three years from the due date of the contributions claimed to have been overpaid or which would be contrary to the requirements of the social security act or any amendments thereto. The amount of unemployment compensation benefits, if any, paid to any claimant, which is based upon wage credits established as a result of the overstatement of wages which caused the overpayment, shall be deducted from the refund. Any refunds of interest paid into the employment security special administration fund established by section 31-259 shall be paid from said fund."