A BILL TO BE ENTITLED AN ACT TO ADDRESS THE UNEMPLOYMENT INSURANCE DEBT AND TO FOCUS NORTH CAROLINA'S UNEMPLOYMENT INSURANCE PROGRAM ON PUTTING CLAIMANTS BACK TO WORK. Enacted February 19, 2013. Effective July 1, 2013.
Summary date: Feb 19 2013 - View summary
Bill H 4 (2013-2014)Summary date: Jan 31 2013 - View summary
House Committee Substitutemakes the following changes to the 1st edition.
Makes organizational changes to GS Chapter 96. Moves the definitions from Article 2 of GS Chapter 96 to Article 1. Puts the definitions in alphabetical order, cross-references many of the definitions to their meaning under the Federal Unemployment Tax Act (FUTA), and deletes definitions that are not needed.
Identifiesthe four funds used to administer GS Chapter 96with namesto more accurately reflect their purpose: (1) Unemployment Insurance Fund, (2) Unemployment Insurance Reserve Fund, (3) Employment Security Administration Fund, and (4) Supplemental Employment Security Administration Fund.
The 1st edition created a new Article 2A in Chapter 96; repealedtheexisting provisions of Article 2, Unemployment Insurance Division;andrecodified statutes that were previously in Article 2 under new Article 2A. The PCS reinserts Article 2 and renames itas Contributions and Payments by Employers. Amends Article 2 ofChapter96andrepeals the current stepped tax schedules that determine an employer's State Unemployment Tax Act (SUTA) contribution rate and replaces the schedules with an equation based on a reserve ratio.
Amendsproposed Article 2A from the 1st edition to nowcover Administration andCollection of Contributions; deletes the recodification of statutory provisions previously innew Article 2AinChapter 96; andplacesprovisions previously in new Article 2A in a new Article 2B, Administration of Employer Accounts.
Further reorganizes recodified statutes placed in proposed Article 2A in the 1st edition, moving some of those provisions to a new Article 2C in Chapter 96 with the heading Benefits Payable for Unemployment Compensation and some to a new Article 2D in Chapter 96 with the heading Administration of Benefits.
Makes additional conforming changes.
Adds a new Article 12R, Joint Legislative Oversight Committee on Unemployment insurance,in GS Chapter 120 (creation of committee in the 1st edition was uncodified). Provides that Article 12R expires as of July 1, 2023.
Removes provisions providing for the transfer of funds to the Unemployment Insurance (UI)Fund and the appropriation of funds from the Special Employment Security Administration Fund to the UI Fund tomake principal payments on the debt to the Federal government for advances to pay unemployment compensation benefits.
Declares the act effective as of July 1, 2013 (was, when the act becomes law).Clarifies that changes made by the act to unemployment benefits apply to claims filed on or after July 1, 2013. Provides that changes made by the act to require an account balance by an employer that is a governmental entity or a nonprofit organization and that elects to finance benefits by making reimbursement payments in lieu of contributions apply to advance payments payable for calendar quarters beginning on or after July 1, 2013. Changes made by the act to the determination and application of the contribution rate apply to contributions payable for calendar quarters beginning on or after January 1, 2014.
Bill H 4 (2013-2014)Summary date: Jan 30 2013 - View summary
Acknowledges that the General Assembly needs to review and analyze the impact of changes toNorth Carolinatax laws and unemployment insurance lawsin response to the American Taxpayer Relief Act of 2012, signed into law as of January 2, 2013. Makes numerous changes to GS Chapter 96, Employment Security Law.
Makes organizational and clarifying changes to GS 96-5 (created the Employment Security Administration Fund). Deletes language specifying that the Security Administration Fund (Fund), except as otherwise provided in Chapter 96, is subject to the State Budget Act (GSChapter 143C) and the Personnel Act (GS 126-1 et. seq.). Enacts new subsection (a1) to clarify the use of moneys in the Fund. Requires the replacement of lost or improperly expended moneys received from the Secretary of Labor under Title III of the Social Security Act but deletes replacement requirement regarding unencumbered balances in the Fund or any moneys made available to the state via the Wagner-Peyser Act or matching funds made available as a result of the Wagner-Peyser Act. Effective July 1, 2013.
Effective July 1, 2013, deletes subsections(c) and (d) of GS 96-5 and essentially replaces those subsections withnew GS 96-5.1 to clarify the accrual of moneys to the Special Employment Security Administration Fund and the use of moneys in the Fund. Deletes (f) concerning the Employment Security Reserve Fund.
Amends subsection (d) of GS 96-6 regarding the management of funds upon the discontinuance of the Unemployment Trust Fund (UTF). Provides that if the UTF ceases to exist, revenues in the UTF may be invested (was, shall be) in bonds or interest bearing obligations of theUnited Statesor other investments as specified. Provides that the treasurer may (was, shall) dispose of securities or other properties belonging to the Fund only under the direction of the Secretary of the Department of Commerce (Secretary). Makes additional clarifying changes. Effective July 1, 2013.
Enacts new GS 96-6.1 in Article 1, GS Chapter 96 to create a special fund, the Employment SecurityReserve Fund, consisting of revenues received from the tax imposed under GS 96-19.34. Limits the use of the Reserve Funds to the listed purposes. Caps the balance in the Reserve Fund at $50 million or the amount of interest paid the previous September on advances under Title XII of the Social Security Act. Directs that any amount exceeding the cap must be transferred to the Unemployment Insurance Fund. Effective July 1, 2013.
Requires the Office of State Budget and Management (OSBM), in conjunction with the Office of the State Controller and the Department of Commerce (Department), to transfer and allocate any unencumbered cash balance as of June 30, 2013 from the Worker Training Trust Fund and the Training and Employment Accountto the Unemployment Insurance Fund (UI Fund). Directs that each of the special funds be closed after the transfer of funds. Appropriates $10 million from the Special Employment Security Administration Fund to the UI Fund for the 2013-14 fiscal year to be used to make principal payments on advances from the federal government under Title XII of the Social Security Act to the UI Fund to pay unemployment compensation benefits. Specifies factors that must be considered in determining the appropriate number and location of offices under the Department's Division of Workforce Solutions. Effective July 1, 2013.
Recodifies and repeals the existing provisions of Article 2 (Unemployment Division)of GS Chapter 96. Requires that employersreport and remit contributions and the 20%tax on contributionsas required under Article 2 of GS Chapter 96 as it existed on January 1, 2013.Recodifiesthe following statutes as indicated: 96-15 (96-19.80), 96-15.1 (96-19.82), 96-15.2 (96-19.83), 96-16 (96-19.81), 96-17 (96-19.84), 96-18 (96-19.90) and 96-19 (96-19.92).
Adds a new Article 2A, Unemployment Insurance Division, which rewrites, reorganizes, clarifies, and modernizesrepealed Article 2 of GS Chapter 96. Includes definitionsfor terms as they apply in GS Chapter 96.
Enacts new GS 96-19.3 defining employment and what constitutes employment services, also specifies what services do not constitute employment as defined in the statute. Enacts new GS 96-19.4 to provide an expansive definition as to what constitutes an employer. Defines initial unemployment, unemployed, and separation payments in new GS 96-19.6. Effective July 1, 2013.
Ties the minimum and maximum number of weeks allowedfor a UIclaim filed during a six-month base period tothe seasonal adjusted statewide unemployment rate used in that base period. Specifies that one six-month base period begins on January 1 and the other base period begins on July 1. Provides additional criteria for determining the unemployment rate in use and calculating the minimum and maximum number of weeks of UI benefits.Sets the maximum weekly benefit amount at $350.00. Makes additional programmatic changes. Includes guidelines for state and federal extended benefitperiod and eligibility criteria for extended benefits.Provides for the attachment and garnishment of fraudulent overpayments. EffectiveJuly 1, 2013.
Establishes the eight-member Joint Legislative Oversight Committee on Unemployment Insurance, consisting of four members appointed by the Speaker of the House of Representatives and four members appointed by the President Pro Tempore of the Senate. Provides for the operation and staffing of the Committee. Directs the Committee to study and review all unemployment insurance matters, workforce development programs, and reemployment assistance efforts of the state.
Providesthat the Committee may report its findings and recommendations to any regular session of the General Assembly. This provision is effective when it becomes law and expires July 1, 2023.
Enactsnew GS 96-19.30 regarding payment of contributions by an employer and new GS 96-19.31 regarding an updated employer's rate of contribution to the UI Fund effective as of January 1, 2014 and applies to taxable years on or after that date. Provides that all other provisions of proposed Article 2A of GS Chapter 96 effective on July 1, 2013.
Except as otherwise indicated, this act is effective when it becomes law.