(

a) Except as provided in subdivision (b), no employer shall be eligible for a contribution rate of more or less than 3.4 percent for any rating period unless his or her reserve account has been subject to benefit charges during the period of complete consecutive calendar quarters ending on the computation date for that rating period and he or she is qualified under Sections and 977.5. (

b) No new employer shall be eligible for a contribution rate of more or less than 3.4 percent unless his or her reserve account has been subject to benefit charges during the period of complete consecutive calendar months ending on the computation date and the new employer is qualified under Sections and 977.5. (

c) For the purposes of this

section “new employer” means any of the following:

(1) An employer who first qualifies as an employer after the calendar year, and whose account is continuously subject to benefit charges from the date of first chargeability, except that a successor employer under

Section is not a new employer if the successor applies for or obtains the transfer of the reserve account or part thereof of a predecessor who is not a new employer.

(2) An employer whose entire reserve account has been transferred to a successor under

Article 5 (commencing with

Section 1051) of

Chapter of this part.

(3) An employer whose reserve account has been canceled pursuant to

Section 1029. (

d) Section applies to a new employer, except that for the purposes of this

section “average base payroll” means:

(1) The payroll in the calendar year immediately preceding the computation date for a new employer with a payroll only in that calendar year.

(2) The quotient obtained by dividing by two the total amount of taxable wages paid by a new employer during the most recent period of two consecutive calendar years immediately preceding the computation date, for a new employer with a payroll only in each of, or only in the first of, the two consecutive calendar years. (

e) The contribution rate of an employer, for any period prior to January 1, 1988, shall not be changed, other than by the provisions of Sections and 977.5, when the director makes a determination, pursuant to

Section 135.1 or 135.2, because of arrangements entered into or business activities conducted between January 1, 1984, and January 1, 1986. (

f) This

section does not apply to an employer assigned the maximum rate pursuant to subdivision (

c) of

Section 977.