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H0578.......................................by COMMERCE AND HUMAN RESOURCES
EMPLOYMENT SECURITY RESERVE FUND - Amends existing law to provide that, for
calendar year 2006, the imposition of a reserve tax for the Employment
Security Reserve Fund shall not be precluded even if the balance of the
reserve fund exceeds forty-nine percent of the actual balance of the
Employment Security Fund.
02/08 House intro - 1st rdg - to printing
02/09 Rpt prt - to Com/HuRes
02/14 Rpt out - rec d/p - to 2nd rdg
02/15 2nd rdg - to 3rd rdg
02/21 3rd rdg - PASSED - 55-15-0
AYES -- Anderson, Andrus, Barraclough, Bastian, Bayer, Bedke, Bell,
Bilbao, Black, Block, Boe, Bolz, Bradford, Cannon, Collins, Deal,
Denney, Edmunson, Eskridge, Field(18), Field(23), Garrett, Harwood,
Henbest, Jaquet, Kemp, Lake, LeFavour, Martinez, Mathews, McKague,
Miller, Mitchell, Nielsen, Nonini, Pasley-Stuart, Pence, Ringo,
Roberts, Rusche, Rydalch, Sali(Sali), Sayler, Schaefer, Shepherd(2),
Shepherd(8), Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Trail,
Wills, Wood, Mr. Speaker
NAYS -- Barrett, Brackett, Chadderdon, Clark, Crow, Ellsworth, Hart,
Henderson, Loertscher, McGeachin, Moyle, Raybould, Ring, Shirley,
Stevenson
Absent and excused -- None
Floor Sponsor - Schaefer
Title apvd - to Senate
02/22 Senate intro - 1st rdg - to Com/HuRes
03/01 Rpt out - rec d/p - to 2nd rdg
03/02 2nd rdg - to 3rd rdg
03/07 3rd rdg - PASSED - 33-0-2
AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett, Cameron,
Coiner, Compton, Corder, Darrington, Davis, Fulcher, Gannon, Geddes,
Goedde, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge,
Malepeai, Marley, McGee, McKenzie, Richardson, Schroeder, Stegner,
Stennett, Sweet, Werk, Williams
NAYS -- None
Absent and excused -- Burtenshaw, Pearce
Floor Sponsor - Cameron
Title apvd - to House
03/08 To enrol
03/09 Rpt enrol - Sp signed
03/10 Pres signed
03/13 To Governor
03/14 Governor signed
Session Law Chapter 48
Effective: 01/01/06
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 578
BY COMMERCE AND HUMAN RESOURCES COMMITTEE
1 AN ACT
2 RELATING TO THE EMPLOYMENT SECURITY LAW; AMENDING SECTION 72-1347A, IDAHO
3 CODE, TO REVISE CONDITIONS WHEN A RESERVE TAX MAY BE IMPOSED FOR CALENDAR
4 YEAR 2006; DECLARING AN EMERGENCY AND PROVIDING RETROACTIVE APPLICATION.
5 Be It Enacted by the Legislature of the State of Idaho:
6 SECTION 1. That Section 72-1347A, Idaho Code, be, and the same is hereby
7 amended to read as follows:
8 72-1347A. EMPLOYMENT SECURITY RESERVE FUND -- SPECIAL ADMINISTRATION
9 FUND. (1) There is established in the state treasury a special trust fund,
10 separate and apart from all other public funds of this state, to be known as
11 the employment security reserve fund, hereinafter "reserve fund." Except as
12 provided herein, all proceeds from the reserve tax defined in subsection (2)
13 of this section shall be paid into the reserve fund. The moneys in the reserve
14 fund may be used by the director for loans to the employment security fund,
15 section 72-1346, Idaho Code, as security for loans from the federal unemploy-
16 ment insurance trust fund, and for the repayment of any interest bearing
17 advances, including interest, made under title XII of the social security act,
18 42 USC 1321 through 1324, and shall be available to the director for expendi-
19 ture in accordance with the provisions of this section. The state treasurer
20 shall be the custodian of the reserve fund and shall invest said moneys in
21 accordance with law. The state treasurer shall disburse the moneys from the
22 reserve fund in accordance with the directions of the director.
23 (2) A reserve tax is imposed on all covered employers required to pay
24 contributions pursuant to section 72-1350, Idaho Code, except deficit employ-
25 ers who have been assigned a taxable wage rate from deficit rate class six
26 pursuant to section 72-1350(8)(a), Idaho Code. The reserve tax shall be due
27 and payable at the same time and in the same manner as contributions. If the
28 reserve fund is less than one percent (1%) of state taxable wages in the
29 penultimate year as of September 30 of the preceding calendar year, the
30 reserve tax rate for all eligible, standard-rated and deficit employers shall
31 be equal to the taxable wage rate then in effect less the assigned contribu-
32 tion rate and training tax rate. The provisions of this chapter which apply to
33 the payment and collection of contributions also apply to the payment and col-
34 lection of the reserve tax, including the same calculations, assessments,
35 method of payment, penalties, interest, costs, liens, injunctive relief, col-
36 lection procedures and refund procedures. In the administration of the provi-
37 sions of this section and the collection of the reserve tax, the director is
38 granted all rights, authority, and prerogatives granted the director under the
39 provisions of this chapter. Moneys collected from an employer delinquent in
40 paying contributions and reserve taxes shall first be applied to pay any pen-
41 alty and interest imposed pursuant to the provisions of this chapter and shall
42 then be applied pro rata to pay delinquent contributions to the employment
43 security fund, section 72-1346, Idaho Code, and delinquent reserve taxes to
2
1 the reserve fund pursuant to this section. Any interest and penalties col-
2 lected pursuant to this subsection shall be paid into the state employment
3 security administrative and reimbursement fund, section 72-1348, Idaho Code,
4 and any interest or penalties refunded under this subsection shall be paid out
5 of that same fund. Reserve taxes paid pursuant to this subsection may not be
6 deducted in whole or in part by any employer from the wages of individuals in
7 its employ. All reserve taxes collected pursuant to this subsection shall be
8 deposited in the clearing account of the employment security fund, section
9 72-1346, Idaho Code, for clearance only and shall not become part of such
10 fund. After clearance, the moneys shall be deposited in the reserve fund
11 established in subsection (1) of this section. No reserve tax shall be imposed
12 for any calendar year if, as of September 30 of the preceding calendar year,
13 the balance of the reserve fund equals or exceeds one percent (1%) of the
14 state taxable wages for the penultimate calendar year, or exceeds forty-nine
15 percent (49%) of the actual balance of the employment security fund, section
16 72-1346, Idaho Code. Provided however, and not withstanding any other provi-
17 sions of this subsection, for calendar year 2006, the imposition of a reserve
18 tax shall not be precluded even if the balance of the reserve fund exceeds
19 forty-nine percent (49%) of the actual balance of the employment security
20 fund.
21 (3) The interest earned from investment of the reserve fund shall be
22 deposited in a fund established in the state treasurer's office, to be known
23 as the department of commerce and labor special administration fund, hereinaf-
24 ter "special administration fund." The moneys in the special administration
25 fund shall be held separate and apart from all other public funds of this
26 state. The state treasurer shall be the custodian of this fund and may invest
27 said moneys in accordance with law. Any interest earned on said moneys shall
28 be deposited in the special administration fund. In the absence of a specific
29 appropriation, the moneys in the special administration fund are perpetually
30 appropriated to the director and may be expended with the approval of the
31 advisory council appointed pursuant to section 72-1336, Idaho Code, for costs
32 related to programs administered by the department. The director shall report
33 annually to the joint finance-appropriations committee and the advisory coun-
34 cil the expenditures and disbursements made from the fund during the preceding
35 fiscal year, and the expenditures and disbursements and commitments made dur-
36 ing the current fiscal year to date.
37 (4) Administrative costs related to the reserve fund and the special
38 administration fund shall be paid from federal administrative grants received
39 under title III of the social security act, to the extent permitted by federal
40 law, and then from the special administration fund.
41 SECTION 2. An emergency existing therefor, which emergency is hereby
42 declared to exist, this act shall be in full force and effect on and after its
43 passage and approval, and retroactively to January 1, 2006.
STATEMENT OF PURPOSE
RS15942
This bill removes one of the conditions that prohibit the
deposit of 17 percent of employer unemployment insurance taxes into
the state-invested Employment Security Reserve Fund for calendar
year 2006. This does not increase the amount employers must pay
under Idaho's Employment Security Law. It simply eliminates the
requirement that the balance in the Employment Security Reserve
Fund must not exceed 49 percent of the balance in Idaho's
Washington, D.C., Trust Fund for money to be deposited into the
Reserve Fund instead of the Washington, D.C., Trust Fund for
calendar year 2006. Both the Reserve Fund and the Washington,
D.C., Trust Fund are used to pay unemployment insurance benefits.
But since the Reserve Fund is kept in Idaho and is invested by the
State Treasurer, the interest earned on its investment is deposited
in the Special Administration Fund and can be used to administer
Department programs.
The bill has an emergency clause so one of the conditions on
the Reserve Fund can be removed retroactively to January 1, 2006.
FISCAL NOTE
There is no impact on the state General Fund. If enacted, the
bill will allow the Department to keep 17 percent of the
unemployment insurance taxes received in 2006 in the Reserve Fund
in Idaho. That money would otherwise go to Idaho's Washington,
D.C., Trust Fund. Interest earned on the Reserve Fund will
increase revenue to the Special Administration Fund, which will be
used to pay expenses incurred in the administration of the
Department's programs, including the Commerce Division's share of
indirect costs. Without this amendment, the Commerce Division's
indirect costs would have to be paid from the state General Fund.
CONTACT
Name: Bob Fick
Agency: Idaho Commerce & Labor
Phone: 332-3570 ext. 3628; 409-9818 cell
STATEMENT OF PURPOSE/FISCAL NOTE H 578