HB1550 97TH GENERAL ASSEMBLY

LRB097 07934 AEK 48051 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1550

Introduced 2/15/2011, by Rep. Michael J. Zalewski

SYNOPSIS AS INTRODUCED:

820 ILCS 405/1506.1	from Ch. 48, par. 576.1
820 ILCS 405/3150 new

Amends the Unemployment Insurance Act. Changes employer contribution rates of each employer who has incurred liability for the payment of contributions within each of the 3 calendar years immediately preceding the calendar year for which a rate is being determined. Creates the Unemployment Insurance Task Force to study and make recommendations regarding ideas to reform unemployment insurance in Illinois in a way which encourages business growth while ensuring protection of workers who become involuntarily unemployed. Provides that reform ideas may include, but are not limited to, altering employer contribution rates to place a greater burden upon those employers with greater employment loss experience, allowing for and developing a private unemployment insurance market, and privatizing unemployment insurance through the establishment of employee-owned accounts similar to retirement accounts to be funded by contributions from the employer and employee to be used at the discretion of the employee if he or she becomes unemployed. Provides that the Task Force members shall serve voluntarily and without compensation. Provides that the Task Force shall submit a final report of its findings and recommendations to the Governor and the General Assembly on or before December 31, 2012. Provides that the final report shall include estimated costs and savings data for the State, Illinois businesses, and Illinois workers related to any recommendations. Provides that the Task Force is abolished on January 1, 2013. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning employment.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Unemployment Insurance Act is amended by changing Section 1506.1 and by adding Section 3150 as follows:

(820 ILCS 405/1506.1) (from Ch. 48, par. 576.1)

Sec. 1506.1. Determination of Employer's Contribution Rate.

A. The contribution rate for any calendar year prior to 1982 of each employer who has incurred liability for the payment of contributions within each of the three calendar years immediately preceding the calendar year for which a rate is being determined shall be determined in accordance with the provisions of this Act as amended and in effect on October 5, 1980.

B. The contribution rate for calendar years 1982 and 1983 of each employer who has incurred liability for the payment of contributions within each of the three calendar years immediately preceding the calendar year for which a rate is being determined shall be the product obtained by multiplying the employer's benefit wage ratio for that calendar year by the adjusted state experience factor for the same year, provided that:

1. No employer's contribution rate shall be lower than two-tenths of 1 percent or higher than 5.3%; and

2. Intermediate contribution rates between such minimum and maximum rates shall be at one-tenth of 1 percent intervals.

3. If the product obtained as provided in this subsection is not an exact multiple of one-tenth of 1 percent, it shall be increased or reduced, as the case may be, to the nearer multiple of one-tenth of 1 percent. If such product is equally near to two multiples of one-tenth of 1 percent, it shall be increased to the higher multiple of one-tenth of 1 percent. If such product is less than two-tenths of one percent, it shall be increased to two-tenths of 1 percent, and if greater than 5.3%, it shall be reduced to 5.3%.

The contribution rate of each employer for whom wages became benefit wages during the applicable period specified in Section 1503, but who paid no contributions upon wages for insured work during such period on or before the date designated in Section 1503, shall be 5.3%.

The contribution rate of each employer for whom no wages became benefit wages during the applicable period specified in Section 1503, and who paid no contributions upon wages for insured work during such period on or before the date specified in Section 1503, shall be 2.7 percent.

Notwithstanding the other provisions of this Section, no employer's contribution rate with respect to calendar years 1982 and 1983 shall exceed 2.7 percent of the wages for insured work paid by him during any calendar quarter, if such wages paid during such calendar quarter total less than $50,000.

C. The contribution rate for calendar years 1984, 1985 and 1986 of each employer who has incurred liability for the payment of contributions within each of the two calendar years immediately preceding the calendar year for which a rate is being determined shall be the product obtained by multiplying the employer's benefit wage ratio for that calendar year by the adjusted state experience factor for the same year, provided that:

1. An employer's minimum contribution rate shall be the greater of: .2%; or, the product obtained by multiplying .2% by the adjusted state experience factor for the applicable calendar year.

2. An employer's maximum contribution rate shall be the greater of 5.5% or the product of 5.5% and the adjusted State experience factor for the applicable calendar year except that such maximum contribution rate shall not be higher than 6.3% for calendar year 1984, nor be higher than 6.6% or lower than 6.4% for calendar year 1985, nor be higher than 6.7% or lower than 6.5% for calendar year 1986.

3. If any product obtained in this subsection is not an exact multiple of one-tenth of one percent, it shall be increased or reduced, as the case may be to the nearer multiple of one-tenth of one percent. If such product is equally near to two multiples of one-tenth of one percent, it shall be increased to the higher multiple of one-tenth of one percent.

4. Intermediate rates between such minimum and maximum rates shall be at one-tenth of one percent intervals.

The contribution rate of each employer for whom wages became benefit wages during the applicable period specified in Section 1503, but who paid no contributions upon wages for insured work during such period on or before the date designated in Section 1503, shall be the maximum contribution rate as determined by paragraph 2 of this subsection. The contribution rate for each employer for whom no wages became benefit wages during the applicable period on or before the date specified in Section 1503, and who paid no contributions upon wages for insured work during such period on or before the date specified in Section 1503, shall be the greater of 2.7% or 2.7% times the then current adjusted state experience factor as determined by the Director in accordance with the provisions of Sections 1504 and 1505.

Notwithstanding, the other provisions of this Section, no employer's contribution rate with respect to the calendar year 1984 shall exceed 2.7 percent times the then current adjusted state experience factor as determined by the Director in accordance with the provisions of Sections 1504 and 1505 of the wages for insured work paid by him during any calendar quarter, if such wages paid during such calendar quarter total less than $50,000.

D. The contribution rate for calendar years 1987, 1988, 1989 and 1990 of each employer who has incurred liability for the payment of contributions within each of the three calendar years immediately preceding the calendar year for which a rate is being determined shall be the product obtained by multiplying the employer's benefit wage ratio for that calendar year by the adjusted state experience factor for the same year, provided, that:

1. An employer's minimum contribution rate shall be the greater of .2% or the product obtained by multiplying .2% by the adjusted State experience factor for the applicable calendar year.

2. An employer's maximum contribution rate shall be the greater of 5.5% or the product of 5.5% and the adjusted State experience factor for the calendar year 1987 except that such maximum contribution rate shall not be higher than 6.7% or lower than 6.5% and an employer's maximum contribution rate for 1988, 1989 and 1990 shall be the greater of 6.4% or the product of 6.4% and the adjusted State experience factor for the applicable calendar year.

3. If any product obtained in this subsection is not an exact multiple of one-tenth of one percent, it shall be increased or reduced, as the case may be to the nearer multiple of one-tenth of 1 percent. If such product is equally near to two multiples of one-tenth of 1 percent, it shall be increased to the higher multiple of one-tenth of 1 percent.

4. Intermediate rates between such minimum and maximum rates shall be at one-tenth of 1 percent intervals.

The contribution rate of each employer for whom wages became benefit wages during the applicable period specified in Section 1503, but who did not report wages for insured work during such period, shall be the maximum contribution rate as determined by paragraph 2 of this subsection. The contribution rate for each employer for whom no wages became benefit wages during the applicable period specified in Section 1503, and who did not report wages for insured work during such period, shall be the greater of 2.7% or 2.7% times the then current adjusted State experience factor as determined by the Director in accordance with the provisions of Sections 1504 and 1505.

E. The contribution rate for calendar year 1991 and each calendar year thereafter of each employer who has incurred liability for the payment of contributions within each of the three calendar years immediately preceding the calendar year for which a rate is being determined shall be the product obtained by multiplying the employer's benefit ratio defined by Section 1503.1 for that calendar year by the adjusted state experience factor for the same year, provided that:

1. Except as otherwise provided in this paragraph, an employer's minimum contribution rate shall be the greater of 0.2% or the product obtained by multiplying 0.2% by the adjusted state experience factor for the applicable calendar year. An employer's minimum contribution rate shall be 0.1% for calendar year 1996.

2. An employer's maximum contribution rate shall be the greater of 6.4% or the product of 6.4% and the adjusted state experience factor for the applicable calendar year.

3. If any product obtained in this subsection is not an exact multiple of one-tenth of one percent, it shall be increased or reduced, as the case may be to the nearer multiple of one-tenth of one percent. If such product is equally near to two multiples of one-tenth of one percent, it shall be increased to the higher multiple of one-tenth of one percent.

4. Intermediate rates between such minimum and maximum rates shall be at one-tenth of one percent intervals.

The contribution rate of each employer for whom wages became benefit wages during the applicable period specified in Section 1503 or for whom benefit payments became benefit charges during the applicable period specified in Section 1503.1, but who did not report wages for insured work during such period, shall be the maximum contribution rate as determined by paragraph 2 of this subsection. The contribution rate for each employer for whom no wages became benefit wages during the applicable period specified in Section 1503 or for whom no benefit payments became benefit charges during the applicable period specified in Section 1503.1, and who did not report wages for insured work during such period, shall be the greater of 2.7% or 2.7% times the then current adjusted state experience factor as determined by the Director in accordance with the provisions of Sections 1504 and 1505.

E-5. The contribution rate for calendar year 2012 and each calendar year thereafter of each employer who has incurred liability for the payment of contributions within each of the 3 calendar years immediately preceding the calendar year for which a rate is being determined shall be the product obtained by multiplying the employer's benefit ratio defined by Section 1503.1 for that calendar year by the adjusted State experience factor for the same year, provided that:

1. Except as otherwise provided in this paragraph, an employer's minimum contribution rate shall be 0.0%.

2. An employer's maximum contribution rate shall be the greater of 7.4% or the product of 7.4% and the adjusted State experience factor for the applicable calendar year.

3. If any product obtained in this subsection is not an exact multiple of one-tenth of 1%, it shall be increased or reduced, as the case may be, to the nearer multiple of one-tenth of 1%. If such product is equally near to 2 multiples of one-tenth of 1%, it shall be increased to the higher multiple of one-tenth of 1%.

4. Intermediate rates between such minimum and maximum rates shall be at one-tenth of 1% intervals. The contribution rate of each employer for whom wages became benefit wages during the applicable period specified in Section 1503 or for whom benefit payments became benefit charges during the applicable period specified in Section 1503.1, but who did not report wages for insured work during such period, shall be the maximum contribution rate as determined by paragraph 2 of this subsection. The contribution rate for each employer for whom no wages became benefit wages during the applicable period specified in Section 1503 or for whom no benefit payments became benefit charges during the applicable period specified in Section 1503.1, and who did not report wages for insured work during such period, shall be the greater of 2.7% or 2.7% times the then current adjusted State experience factor as determined by the Director in accordance with the provisions of Sections 1504 and 1505.

F. Notwithstanding the other provisions of this Section, and pursuant to Section 271 of the Tax Equity and Fiscal Responsibility Act of 1982, as amended, no employer's contribution rate with respect to calendar years 1985, 1986, 1987 and 1988 shall, for any calendar quarter during which the wages paid by that employer are less than $50,000, exceed the following: with respect to calendar year 1985, 3.7%; with respect to calendar year 1986, 4.1%; with respect to calendar year 1987, 4.5%; and with respect to calendar year 1988, 5.0%.

G. Notwithstanding the other provisions of this Section, no employer's contribution rate with respect to calendar year 1989 and each calendar year thereafter shall exceed 5.4% of the wages for insured work paid by him during any calendar quarter, if such wages paid during such calendar quarter total less than $50,000, plus any applicable penalty contribution rate calculated pursuant to subsection C of Section 1507.1.

(Source: P.A. 94-301, eff. 1-1-06.)

(820 ILCS 405/3150 new)

Sec. 3150. Unemployment Insurance Task Force.

(a) Definition. As used in this Section, "Task Force" means the Unemployment Insurance Task Force.

(b) Creation and duties. The Unemployment Insurance Task Force is created to study and make recommendations regarding ideas to reform unemployment insurance in Illinois in a way which encourages business growth while ensuring protection of workers who become involuntarily unemployed. Reform ideas may include, but are not limited to, altering employer contribution rates to place a greater burden upon those employers with greater employment loss experience, allowing for and developing a private unemployment insurance market, and privatizing unemployment insurance through the establishment of employee-owned accounts similar to retirement accounts to be funded by contributions from the employer and employee to be used at the discretion of the employee if he or she becomes unemployed.

(c) Membership. The Task Force shall be comprised of the following individuals:

(1) one member appointed by the Governor, who shall serve as chairperson of the Task Force;

(2) one member appointed by the Speaker of the House of Representatives;

(3) one member appointed by the Minority Leader of the House of Representatives;

(4) one member appointed by the President of the Senate; and

(5) one member appointed by the Minority Leader of the Senate.

(d) Appointments. Appointments shall be made 90 days from the effective date of this amendatory Act of the 97th General Assembly.

(e) Compensation. The Task Force members shall serve voluntarily and without compensation.

(f) Support. The Department shall be responsible for providing staff and administrative support to the Task Force.

(g) Hearings. The Task Force shall solicit comments and hold public hearings before filing any report required by this Section.

(h) Reporting requirements. The Task Force shall submit a final report of its findings and recommendations to the Governor and the General Assembly on or before December 31, 2012. The final report shall include estimated costs and savings data for the State, Illinois businesses, and Illinois workers related to any recommendations.

(i) Abolishment. The Task Force is abolished on January 1, 2013.

(j) Repeal. This Section is repealed on January 1, 2013.

Section 99. Effective date. This Act takes effect upon becoming law.