2001 Legislation
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SENATE BILL NO. 1021 – Employment Security Law, Reed Act

SENATE BILL NO. 1021

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Daily Data Tracking History



S1021.......................................by COMMERCE AND HUMAN RESOURCES
EMPLOYMENT SECURITY LAW - REED ACT - Amends existing law to provide that
the conditions and restrictions applicable to Reed Act distributions in
federal fiscal years 2000 and 2001 also apply to Reed Act distributions in
federal fiscal year 2002; and to eliminate the requirement that interest
charges on a federal advance to the Employment Security Fund must be paid
from revenues derived from a tax on experience-rated employers.
                                                                        
01/17    Senate intro - 1st rdg - to printing
01/18    Rpt prt - to Com/HuRes
02/07    Rpt out - rec d/p - to 2nd rdg
02/08    2nd rdg - to 3rd rdg
02/09    3rd rdg - PASSED - 33-0-1(1 vacant)
      AYES -- Andreason, Boatright, Branch(Bartlett), Brandt, Bunderson,
      Burtenshaw, Cameron, Danielson, Darrington, Davis, Deide, Dunklin,
      Frasure, Geddes, Goedde, Hawkins, Ingram, Ipsen, King-Barrutia, Lee,
      Lodge, Noh, Richardson, Risch, Sandy, Schroeder, Sorensen, Stegner,
      Stennett, Thorne, Wheeler, Whitworth, Williams,
      NAYS -- None
      Absent and excused -- Keough
      Vacant -- Dist. #4
    Floor Sponsor -- Stegner
    Title apvd - to House
02/12    House intro - 1st rdg - to Com/HuRes
02/16    Rpt out - rec d/p - to 2nd rdg
02/19    2nd rdg - to 3rd rdg
02/20    3rd rdg - PASSED - 62-0-8
      AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Boe, Bolz,
      Bradford, Bruneel, Callister, Campbell, Chase, Clark, Collins, Cuddy,
      Deal, Denney, Ellis, Ellsworth, Eskridge, Field(13), Field(20),
      Gould, Hadley, Hammond, Harwood, Henbest, Higgins, Jaquet, Jones,
      Kellogg, Kendell, Kunz, Lake, Langford, Loertscher, Mader, Marley,
      McKague, Meyer, Montgomery, Mortensen, Moss, Moyle, Pearce, Pischner,
      Pomeroy, Raybould, Robison, Sali, Sellman, Shepherd, Smith, Smylie,
      Stone, Swan, Tilman, Trail, Wheeler, Wood, Young, Mr. Speaker
      NAYS -- None
      Absent and excused -- Black, Crow, Gagner, Hornbeck, Ridinger,
      Roberts, Schaefer, Stevenson
    Floor Sponsor -- Trail
    Title apvd - to Senate
02/21    To enrol
02/22    Rpt enrol - Pres signed
02/23    Sp signed
02/26    To Governor
03/02    Governor signed
         Session Law Chapter 32
         Effective: 07/01/01

Bill Text


                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  First Regular Session - 2001
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                                    SENATE BILL NO. 1021
                                                                        
                         BY COMMERCE AND HUMAN RESOURCES COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO EMPLOYMENT SECURITY LAW; AMENDING SECTION 72-1346, IDAHO CODE,  TO
  3        PROVIDE  THAT  THE CONDITIONS AND RESTRICTIONS APPLICABLE TO REED ACT DIS-
  4        TRIBUTIONS IN FEDERAL FISCAL YEARS 2000 AND 2001 ALSO APPLY  TO  REED  ACT
  5        DISTRIBUTIONS  IN  FEDERAL  FISCAL YEAR 2002 AND TO MAKE TECHNICAL CORREC-
  6        TIONS; AND  AMENDING  SECTION  72-1346A,  IDAHO  CODE,  TO  ELIMINATE  THE
  7        REQUIREMENT  THAT  INTEREST CHARGES ON A FEDERAL ADVANCE TO THE EMPLOYMENT
  8        SECURITY FUND MUST BE PAID FROM REVENUES DERIVED FROM A TAX ON EXPERIENCE-
  9        RATED EMPLOYERS.
                                                                        
 10    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 11        SECTION 1.  That Section 72-1346, Idaho Code, be, and the same  is  hereby
 12    amended to read as follows:
                                                                        
 13        72-1346.  EMPLOYMENT  SECURITY  FUND. (1) Establishment and Control. There
 14    is established in the state treasury, separate and apart from all other  funds
 15    of  this  state,  an  "Employment  Security  Fund," which shall be perpetually
 16    appropriated to the director to be administered pursuant to the provisions  of
 17    this  chapter and the social security act. This fund shall consist of all con-
 18    tributions collected pursuant to this chapter, payments in lieu  of  contribu-
 19    tions, interest earned upon any moneys in the fund, any property or securities
 20    acquired through the use of moneys belonging to the fund, all earnings of such
 21    property  or securities, moneys temporarily deposited in the clearing account,
 22    and all other moneys received for the fund from any other source.
 23        (2)  Accounts and Deposits. The state controller shall maintain within the
 24    fund three (3) separate accounts: (i) a clearing account, (ii) an unemployment
 25    trust fund account, and (iii) a benefit account. Upon receipt by the director,
 26    all moneys payable to the fund shall be promptly forwarded to the state  trea-
 27    surer  for  immediate  deposit  in  the clearing account. After clearance, all
 28    moneys in the clearing account shall, except as otherwise provided, be  depos-
 29    ited  promptly  with the secretary of the treasury of the United States to the
 30    credit of this state's account in the unemployment trust fund established  and
 31    maintained  pursuant  to  section  904  of  the social security act (42 U.S.C.
 32    1104), any provisions of law in this state to  the  contrary  notwithstanding.
 33    The  benefit account shall consist of all moneys requisitioned for the payment
 34    of benefits from this state's account in the unemployment trust  fund  in  the
 35    treasury of the United States. Moneys in the clearing and benefit accounts may
 36    be deposited by the state treasurer under the direction of the director in any
 37    depository  bank  in which general funds of the state may be deposited, but no
 38    public deposit insurance charge or premium shall be  paid  out  of  the  fund.
 39    Moneys in the clearing and benefit accounts shall not be commingled with other
 40    state  funds  and shall be maintained in separate accounts on the books of the
 41    depository bank. Such moneys shall be secured by the depository  bank  in  the
 42    same manner as required by the general public depository law of this state and
 43    collateral  pledged  for this purpose shall be kept separate and distinct from
                                                                        
                                           2
                                                                        
  1    collateral pledged to secure other funds of the  state.  The  state  treasurer
  2    shall  be  liable  on  his  official  bond for the faithful performance of his
  3    duties in connection with the employment security fund.
  4        (3)  Withdrawals. Moneys requisitioned by the director through  the  trea-
  5    surer  from  this state's account in the unemployment trust fund shall be used
  6    exclusively for the payment of benefits and for refunds  pursuant  to  section
  7    72-1357,  Idaho  Code,  except  that  Reed act moneys credited to this state's
  8    account pursuant to section 903 of the social security act (42  U.S.C.  1103),
  9    shall  be  used exclusively as provided in subsection (4) of this section. The
 10    director through the treasurer shall requisition from the  unemployment  trust
 11    fund  such amounts, not exceeding the amounts standing to this state's account
 12    therein, as he deems necessary for the payment of benefits and refunds  for  a
 13    reasonable period. Upon receipt, such moneys shall be deposited in the benefit
 14    account. Expenditures of moneys in the benefit and clearing accounts shall not
 15    require the approval of the board of examiners or be subject to any provisions
 16    of  law  requiring  specific  appropriations  or other formal release by state
 17    officers of money in their custody. The residual daily balance in the  benefit
 18    account may be invested in accordance with the cash management improvement act
 19    of  1990,  and  earnings  on  those investments may be used to pay the related
 20    banking costs of maintaining the benefit account. Any earnings  in  excess  of
 21    the related banking costs shall be returned to the state's account in the fed-
 22    eral  unemployment trust fund annually. All warrants issued for the payment of
 23    benefits and refunds shall bear the signature of the director. Upon  agreement
 24    between  the director and state controller, amounts in the benefit account may
 25    be transferred to a revolving account established and maintained in a  deposi-
 26    tory bank from which the director may issue checks for the payment of benefits
 27    and  refunds.  Moneys  so  transferred  shall be deposited subject to the same
 28    requirements as provided with respect to moneys in the  clearing  and  benefit
 29    accounts  in  subsection  (2)  of this section. Any balance of moneys requisi-
 30    tioned from the unemployment trust fund which remains unclaimed or  unpaid  in
 31    the  benefit  account  or revolving account after the expiration of the period
 32    for which such sums were requisitioned, may be utilized  for  the  payment  of
 33    benefits  and  refunds during succeeding periods, or, in the discretion of the
 34    director, shall be redeposited with the  secretary  of  the  treasury  of  the
 35    United  States to the credit of this state's account in the unemployment trust
 36    fund.
 37        (4)  Reed aAct mMoneys. Reed act moneys credited to this  state's  account
 38    in  the unemployment trust fund by the secretary of the treasury of the United
 39    States pursuant to section 903 of the social security act  (42  U.S.C.  1103),
 40    may  be requisitioned and used for the payment of benefits and for the payment
 41    of expenses incurred for the administration of this chapter. Moneys  may  only
 42    be  requisitioned and used for the payment of expenses incurred for the admin-
 43    istration of this chapter if the expenses are incurred and the money is requi-
 44    sitioned after the enactment of a specific appropriation  by  the  legislature
 45    which specifies the purposes for which such money is appropriated, the amounts
 46    appropriated therefor, and provides that:
 47        (a)  Such  money  may not be obligated after the close of the two (2) year
 48        period which began on the date of the enactment of the appropriation  law;
 49        and
 50        (b)  The  amount  which  may  be  obligated at any time may not exceed the
 51        amount by which the aggregate of the amounts transferred to the account of
 52        this state pursuant to section 903 of the social security act  (42  U.S.C.
 53        1103), exceeds the aggregate of the amounts used by this state and charged
 54        against the amounts transferred to the account of this state. For the pur-
 55        poses  of  this  subsection, amounts obligated for administrative purposes
                                                                        
                                           3
                                                                        
  1        pursuant to an  appropriation  shall  be  chargeable  against  transferred
  2        amounts at the exact time the obligation is entered into.
  3        (c)  Reed  act  moneys  requisitioned for the payment of benefits shall be
  4        deposited in the benefit account established in  this  section.  Reed  act
  5        moneys  requisitioned  for the payment of administrative expenses pursuant
  6        to a specific appropriation shall be deposited in the employment  security
  7        administration  fund,  section  72-1347,  Idaho  Code,  except that moneys
  8        appropriated for the purchase of lands and buildings shall be deposited in
  9        the state employment security administrative  and  reimbursement  fund  in
 10        accordance  with  section  72-1348, Idaho Code.  Money so deposited shall,
 11        until expended, remain part of the employment security fund  and,  if  not
 12        expended, shall be  promptly returned to this state's account in the unem-
 13        ployment trust fund.
 14        (d5)  Special  Reed Act Distributions. Notwithstanding paragraphs (a), (b)
 15    and (c) of this subsection (4) of this section, Reed act moneys credited  with
 16    respect  to  federal  fiscal  years  1999,  2000, 2001 and 20012 shall be used
 17    solely for the administration of the unemployment insurance  program  and  are
 18    not subject to appropriation by the legislature.
                                                                        
 19        SECTION  2.  That Section 72-1346A, Idaho Code, be, and the same is hereby
 20    amended to read as follows:
                                                                        
 21        72-1346A.  ADVANCES UNDER TITLE XII OF THE SOCIAL SECURITY ACT TO  EMPLOY-
 22    MENT  SECURITY  FUND  --  FEDERAL  ADVANCE INTEREST REPAYMENT FUND. (1) In the
 23    event the director determines that it is necessary to obtain advances from the
 24    federal unemployment account in the unemployment trust fund pursuant to  title
 25    XII  of  the social security act (42 U.S.C. 1321), and that a request for such
 26    advances is authorized under section 1201 of the social security act, or under
 27    any other act of congress extending such authority, the director shall request
 28    the governor to make application to the  secretary  of  labor  of  the  United
 29    States for such advances.
 30        (2)  The  governor  is  authorized to make application to the secretary of
 31    labor of the United States to obtain advances pursuant to  title  XII  of  the
 32    social  security  act (42 U.S.C. 1321 et seq.). Funds so advanced shall be for
 33    the payment of unemployment insurance benefits.
 34        (3)  Any amount transferred to the employment security fund by the  secre-
 35    tary  of  the  treasury  of  the United States in accordance with this section
 36    shall be repaid from the employment security fund as provided in section  1202
 37    of the social security act (42 U.S.C. 1322).
 38        (4)  There  is  established  in  the  state  treasury the "Federal Advance
 39    Interest Repayment Fund." This fund shall consist of all moneys collected pur-
 40    suant to subsection (5) of this section and interest earned upon any moneys in
 41    the fund. All moneys in the fund are perpetually appropriated to the  director
 42    for  the  payment  of  interest  on any advance made to this state pursuant to
 43    title XII of the social security act, except that if, at the end of any calen-
 44    dar year, all advances and interest have been repaid, any remaining balance in
 45    the fund shall be  transferred  to  the  employment  security  fund.  Interest
 46    charges  due  and payable pursuant to section 1202 of the social security act,
 47    shall may be paid by the director from the federal advance interest  repayment
 48    fund.  Such  expenditures  shall  not be subject to any law requiring specific
 49    appropriations or other formal release by state officers  of  money  in  their
 50    custody,  nor  shall  such  expenditures  require the approval of the board of
 51    examiners.
 52        (5)  A federal advance interest repayment  tax  shall  may  be  levied  in
 53    accordance  with the following provisions when required under paragraph (b) of
                                                                        
                                           4
                                                                        
  1    this subsection:
  2        (a)  On the first day of the third month of a calendar quarter, the direc-
  3        tor shall:
  4             (i)   Estimate the interest  payable  on  federal  advances  obtained
  5             under subsections (1) and (2) of this section;
  6             (ii)  Estimate  the  amount of federal advance interest repayment tax
  7             receipts expected to be collected during the quarter for any  preced-
  8             ing calendar quarter in which such tax was assessed;
  9             (iii) Add  the  amount in the federal advance interest repayment fund
 10             on the last day of the immediately preceding calendar quarter to  the
 11             estimate in paragraph (ii) of this subsection; and
 12             (iv)  Subtract  the sum obtained in paragraph (iii) from the estimate
 13             in paragraph (i) of this subsection.
 14        (b)  If the remainder obtained under paragraph (iv) of  subsection  (5)(a)
 15        of  this  section is more than zero, each covered employer subject to this
 16        section shall may, at the director's sole discretion, be assessed  a  fed-
 17        eral advance interest repayment tax. Such tax shall be a percentage of the
 18        contributions  payable under sections 72-1349 and 72-1350, Idaho Code, for
 19        the calendar quarter, but in  no  case  shall  be  less  than  one  dollar
 20        ($1.00).  The  percentage shall be determined by dividing the remainder in
 21        paragraph (iv) of subsection (5)(a)  of  this  section  by  the  estimated
 22        amount  of contributions due and payable on wages paid during the quarter.
 23        The percentage shall be rounded up to the  next  one-tenth  of  a  percent
 24        (0.1%).
 25        (c)  The  tax assessed shall be collected and paid in accordance with such
 26        rules as the director may prescribe. All such  taxes  collected  shall  be
 27        deposited  in  the  federal  advance interest repayment fund. Any such tax
 28        imposed in a calendar quarter shall be paid on or before the last  day  of
 29        the  second  month following the close of such calendar quarter. An exten-
 30        sion of time for payment may be granted for good cause in accordance  with
 31        section 72-1349(4), Idaho Code.
 32        (d)  If  any  covered employer fails to pay such tax on or before the date
 33        on which they are due, such tax shall bear penalty at a rate of five  dol-
 34        lars ($5.00) for each month or fraction thereof until paid; provided, that
 35        in  no  case shall the penalty exceed the actual amount of the tax due and
 36        payable. The date of payment shall be deemed the date of actual receipt by
 37        the director, or if mailed, the date of mailing. Penalties collected  pur-
 38        suant  to  this subsection shall be paid into the federal advance interest
 39        payment fund. Furthermore, if any employer becomes  delinquent  in  making
 40        payment  of the tax as required by this subsection, such employer shall be
 41        subject to the collection provisions  in  sections  72-1355  and  72-1360,
 42        Idaho Code.
 43        (e)  A  covered employer may make application to the director for a refund
 44        or credit of any amount erroneously paid as  tax  under  this  subsection.
 45        Such  applications  and the director's determinations regarding them shall
 46        be made in accordance with the provisions of section 72-1357, Idaho Code.
 47        (f)  This section does not apply to covered employers eligible and  elect-
 48        ing  the  cost  reimbursement payment method under section 72-1349A, Idaho
 49        Code.

Statement of Purpose / Fiscal Impact


                      STATEMENT  OF  PURPOSE
                            RS 10505
                                
This bill contains two amendments to Idaho's Employment Security
Law.
Section 1 concerns federal "Reed Act" moneys.  The U.S. Department
of Labor plans to make a special distribution of federal Reed Act
funds to state employment security agencies in federal fiscal year
2002.  Pursuant to federal law, the conditions and restrictions
applicable to Reed Act distributions in federal fiscal years 2000
and 2001 must also apply to the Reed Act distribution in federal
fiscal year 2002.  Section 1 of this bill amends Idaho Code Section
72-1346 to satisfy this federal requirement.
Section 2 concerns federal loans to Idaho's Employment Security
Fund.  Under present law, if a federal loan is obtained, interest
charges on the loan must be paid from revenues derived from a tax
on experience-rated employers.  The amendment to Section 72-1346A,
Idaho Code, makes imposition of the tax discretionary because
interest charges can also be paid from the Department's Reserve
Fund established by Section 72-1347A Idaho Code.



                         FISCAL  IMPACT
Neither amendment will impact the State's General Fund.
If the amendment to Section 72-1346, Idaho Code is not enacted, the
Idaho Department of Labor will not be able to use approximately
$695,000 in Reed Act funds that it expects to receive in federal
fiscal year 2002.
The amendment to Section 72-1346A, Idaho Code, will make
unnecessary an additional tax on experience-rated employers if the
Department ever needs to borrow federal funds to continue paying
unemployment insurance benefits and the Reserve Fund is used to pay
interest charges on the federal loan.





































CONTACT  
Name:         Dwight Johnson
Agency:  Department of Labor
Phone:        334-6402

Statement of Purpose/Fiscal Note            S102