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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
|||| 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
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