Bill Text: IA SSB1189 | 2025-2026 | 91st General Assembly | Introduced
Bill Title: A bill for an act relating to unemployment insurance taxes on employers.
Spectrum: Committee Bill
Status: (Introduced) 2025-02-26 - Subcommittee Meeting: 03/03/2025 12:30PM Room 217 Conference Room. [SSB1189 Detail]
Download: Iowa-2025-SSB1189-Introduced.html
Senate
Study
Bill
1189
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
WORKFORCE
BILL
BY
CHAIRPERSON
DICKEY)
A
BILL
FOR
An
Act
relating
to
unemployment
insurance
taxes
on
employers.
1
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
2
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Section
1.
Section
96.1A,
subsection
36,
Code
2025,
is
1
amended
to
read
as
follows:
2
36.
“Taxable
wages”
means
an
amount
of
wages
upon
which
3
an
employer
is
required
to
contribute
based
upon
wages
which
4
that
have
been
paid
in
this
state
during
a
calendar
year
to
5
an
individual
by
an
employer
or
the
employer’s
predecessor
,
6
in
this
state
or
another
state
which
extends
a
like
comity
to
7
this
state,
with
respect
to
employment
,
upon
which
the
employer
8
is
required
to
contribute,
which
equals
the
greater
of
the
9
following:
10
a.
Sixty-six
and
two-thirds
For
employers
in
the
first
11
through
eighth
benefit
ratio
ranks,
seventeen
percent
of
the
12
statewide
average
weekly
wage
which
that
was
used
during
the
13
previous
calendar
year
to
determine
maximum
weekly
benefit
14
amounts,
multiplied
by
fifty-two
and
rounded
to
the
next
15
highest
multiple
of
one
hundred
dollars.
16
b.
For
employers
in
the
ninth
benefit
ratio
rank,
17
fifty-eight
percent
of
the
statewide
average
weekly
wage
that
18
was
used
during
the
previous
calendar
year
to
determine
maximum
19
weekly
benefit
amounts,
multiplied
by
fifty-two
and
rounded
to
20
the
next
highest
multiple
of
one
hundred
dollars.
21
b.
c.
That
portion
of
wages
subject
to
a
tax
under
a
22
federal
law
imposing
a
tax
against
which
credit
may
be
taken
23
for
contributions
required
to
be
paid
into
a
state
unemployment
24
compensation
fund.
25
Sec.
2.
Section
96.7,
subsection
2,
paragraph
c,
26
subparagraphs
(1)
and
(2),
Code
2025,
are
amended
to
read
as
27
follows:
28
(1)
A
nonconstruction
contributory
employer
newly
subject
29
to
this
chapter
shall
pay
contributions
at
the
rate
specified
30
in
the
twelfth
fourth
benefit
ratio
rank
but
not
less
than
31
one
percent
until
the
end
of
the
calendar
year
in
which
the
32
employer’s
account
has
been
chargeable
with
benefits
for
33
twelve
consecutive
calendar
quarters
immediately
preceding
the
34
computation
date.
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(2)
A
construction
or
landscaping
contributory
employer,
1
as
defined
under
rules
adopted
by
the
department
pursuant
to
2
chapter
17A
,
which
that
is
newly
subject
to
this
chapter
shall
3
pay
contributions
at
the
rate
specified
in
the
twenty-first
4
ninth
benefit
ratio
rank
until
the
end
of
the
calendar
year
in
5
which
the
employer’s
account
has
been
chargeable
with
benefits
6
for
twelve
consecutive
calendar
quarters.
7
Sec.
3.
Section
96.7,
subsection
2,
paragraph
d,
8
subparagraph
(1),
Code
2025,
is
amended
to
read
as
follows:
9
(1)
The
current
reserve
fund
ratio
is
computed
by
dividing
10
the
total
funds
available
for
payment
of
benefits,
on
the
11
computation
date
or
on
August
15
following
the
computation
12
date
if
the
total
funds
available
for
payment
of
benefits
is
a
13
higher
amount
on
August
15,
by
the
total
wages
paid
in
covered
14
employment
excluding
reimbursable
employment
wages
during
the
15
first
four
calendar
quarters
of
the
five
calendar
quarters
16
year
immediately
preceding
the
computation
date.
However,
17
in
computing
the
current
reserve
fund
ratio,
beginning
July
18
1,
2007,
one
hundred
fifty
million
dollars
shall
be
added
to
19
the
total
funds
available
for
payment
of
benefits
on
each
20
computation
date.
21
Sec.
4.
Section
96.7,
subsection
2,
paragraph
d,
22
subparagraph
(2),
subparagraph
division
(a),
Code
2025,
is
23
amended
by
striking
the
subparagraph
division.
24
Sec.
5.
Section
96.7,
subsection
2,
paragraph
d,
25
subparagraph
(2),
subparagraph
division
(b),
Code
2025,
is
26
amended
by
striking
the
subparagraph
division
and
inserting
in
27
lieu
thereof
the
following:
28
(b)
If
the
current
reserve
fund
ratio:
29
Equals
or
But
is
The
contribution
rate
30
exceeds
less
than
table
in
effect
shall
be
31
_______________________________________________________________
32
——
0.50
A
33
0.50
0.90
B
34
0.90
1.30
C
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1.30
——
D
1
Sec.
6.
Section
96.7,
subsection
2,
paragraph
d,
2
subparagraph
(2),
subparagraph
division
(d),
Code
2025,
is
3
amended
by
striking
the
subparagraph
division
and
inserting
in
4
lieu
thereof
the
following:
5
(d)
Each
employer
qualified
for
an
experience
rating
6
shall
be
assigned
a
contribution
rate
for
each
rate
year
7
that
corresponds
to
the
employer’s
benefit
ratio
rank
in
the
8
contribution
rate
table
effective
for
the
rate
year
from
the
9
following
contribution
rate
tables.
Each
employer’s
benefit
10
ratio
rank
shall
be
computed
by
listing
all
the
employers
by
11
increasing
benefit
ratios,
from
the
lowest
benefit
ratio
to
the
12
highest
benefit
ratio
and
grouping
the
employers
so
listed
into
13
nine
separate
ranks
containing
as
nearly
as
possible
fourteen
14
and
twenty-nine
hundredths
percent
of
the
total
taxable
wages,
15
excluding
reimbursable
employment
wages,
in
the
first
six
16
ranks,
and
four
and
seventy-six
hundredths
percent
of
the
total
17
taxable
wages,
excluding
reimbursable
employment
wages,
in
18
ranks
seven,
eight,
and
nine,
paid
in
covered
employment
during
19
the
four
completed
calendar
quarters
immediately
preceding
the
20
computation
date.
If
an
employer’s
taxable
wages
qualify
the
21
employer
for
two
separate
benefit
ratio
ranks,
the
employer
22
shall
be
afforded
the
benefit
ratio
rank
assigned
the
lower
23
contribution
rate.
Employers
with
identical
benefit
ratios
24
shall
be
assigned
to
the
same
benefit
ratio
rank.
25
Approximate
Contribution
Rate
Tables
26
Benefit
Cumulative
27
Ratio
Taxable
28
Rank
Payroll
Limit
A
B
C
D
29
__________________________________________________________
30
1
14.29%
0.00
0.00
0.00
0.00
31
2
28.58%
0.40
0.30
0.10
0.10
32
3
42.87%
1.20
0.80
0.40
0.20
33
4
57.16%
2.10
1.40
0.60
0.30
34
5
71.45%
3.60
2.40
1.10
0.50
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85.74%
5.40
4.10
1.90
0.90
1
7
90.50%
5.40
5.40
4.20
2.00
2
8
95.26%
5.40
5.40
5.40
2.80
3
9
100.00%
7.00
7.00
7.00
7.00
4
Sec.
7.
EMPLOYER
SAVINGS.
Any
savings
an
employer
receives
5
as
a
result
of
this
Act
should
be
used
for
at
least
one
of
the
6
following
purposes:
7
1.
To
pay
for
employee
salaries
or
benefits.
8
2.
To
use
as
an
alternative
to
unemployment
benefits
during
9
periods
of
seasonal
unemployment.
10
EXPLANATION
11
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
12
the
explanation’s
substance
by
the
members
of
the
general
assembly.
13
This
bill
relates
to
unemployment
insurance
taxes
on
14
employers.
15
The
calculation
of
the
unemployment
contribution
rate
each
16
year
is
a
dynamic
calculation
dependent
upon
the
calculation
17
of
the
current
reserve
ratio,
the
benefit
ratio
rank,
and
18
the
contribution
rate
table
in
effect
for
the
rate
year.
19
The
bill
changes
the
current
reserve
ratio
calculation,
the
20
number
of
benefit
ratio
ranks,
the
contribution
rates,
and
the
21
contribution
rate
table.
22
The
current
reserve
ratio
(calculation
of
available
benefit
23
amount
in
fund)
determines
the
contribution
rate
table
in
24
effect
for
the
rate
year
following
the
computation
date.
The
25
bill
changes
the
computation
of
the
current
reserve
fund
26
ratio
in
Code
section
96.7(2)(d)(1)
by
basing
the
calculation
27
of
the
ratio
on
the
preceding
year
rather
than
the
previous
28
five
calendar
quarters,
and
strikes
the
requirement
that
$150
29
million
be
added
on
the
reserve
ratio
computation
date
to
the
30
total
funds
available
for
benefits.
The
bill
also
strikes
the
31
computation
of
the
highest
cost-benefit
ratio
and
removes
the
32
ratio
from
the
computation
of
the
current
reserve
ratio.
33
The
bill
modifies
the
contribution
rate
table
by
reducing
34
the
number
of
possible
rate
tables
that
could
be
in
effect
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for
the
rate
year
from
eight
contribution
rate
tables
to
four
1
contribution
rate
tables.
Under
the
bill
and
current
law,
only
2
one
contribution
rate
table
may
be
in
effect
per
rate
year.
In
3
reducing
the
number
of
possible
contribution
rate
tables
from
4
eight
to
four,
the
bill
also
changes
the
numbered
contribution
5
rate
designations
to
lettered
contribution
rate
designations.
6
Under
current
law,
there
are
21
benefit
ratio
ranks
in
the
7
contribution
rate
tables.
The
benefit
ratio
is
a
calculation
8
based
upon
the
average
number
of
unemployment
benefits
charged
9
to
an
employer
over
previous
calendar
quarters.
The
higher
the
10
benefits
charged
to
an
employer,
the
higher
the
benefit
ratio
11
rank
the
employer
receives.
The
bill
reduces
the
number
of
12
benefit
ratio
ranks
from
21
to
9.
13
Under
current
law,
each
of
the
ratio
ranks
constitutes
4.76
14
percent
of
total
taxable
wages.
The
bill
groups
the
benefit
15
ratio
ranks
differently
by
separating
each
of
the
first
six
16
benefit
ratio
ranks
by
14.29
percent
of
total
taxable
wages,
17
and
separates
the
last
three
benefit
ratio
ranks
by
4.76
18
percent
of
total
taxable
wages.
19
Under
current
law,
the
highest
contribution
rate
that
20
corresponds
with
the
highest
benefit
ratio
rank
is
9.0
percent.
21
Under
the
bill,
the
highest
contribution
rate
that
corresponds
22
with
the
highest
benefit
ratio
rank
is
7.0
percent.
23
As
a
result
of
the
bill,
each
employer
will
be
assigned
one
24
of
the
nine
new
benefit
ratio
ranks
that
corresponds
with
one
25
of
the
four
new
lettered
contribution
rate
designations
in
26
effect
for
the
rate
year
to
determine
the
contribution
rate
for
27
the
year.
28
The
bill
modifies
the
definition
of
“taxable
wages”
by
29
eliminating
the
wages
paid
to
an
employee
from
another
state
30
from
the
calculation
of
wages
upon
which
an
employer
is
31
required
to
contribute
to
the
unemployment
compensation
fund
32
(fund)
when
the
other
state
extends
a
like
comity
(reciprocity)
33
to
Iowa
for
employment
purposes.
34
Under
current
law,
the
calculation
of
taxable
wages
upon
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which
an
employer
is
required
to
contribute
to
the
fund
is
1
the
greater
amount
of
the
two
amounts
calculated
pursuant
to
2
paragraphs
“a”
and
“b”
under
Code
section
96.1A(36).
The
bill
3
changes
the
calculation
of
one
of
these
amounts
under
paragraph
4
“a”.
Under
current
law,
the
amount
is
calculated
based
on
5
66.66
percent
of
the
statewide
average
weekly
wage
used
during
6
the
previous
calendar
year.
The
resulting
figure
is
then
7
multiplied
by
52
and
rounded
to
the
nearest
$100
to
determine
8
maximum
weekly
benefit
amounts.
The
bill
provides
that
for
9
employers
in
the
first
through
eighth
benefit
ratio
ranks,
the
10
percentage
is
17
percent
of
the
statewide
average
weekly
wage
11
used
during
the
previous
calendar
year.
The
bill
provides
that
12
for
employers
in
the
ninth
benefit
ratio
rank,
the
percentage
13
is
58
percent.
14
The
amount
in
paragraph
“a”
as
calculated
under
the
bill
15
would
be
the
amount
used
to
calculate
taxable
wages
upon
which
16
an
employer
is
required
to
contribute
to
the
fund
if
that
17
amount
exceeds
the
amount
in
paragraph
“b”
under
Code
section
18
96.1A(36).
19
The
bill
provides
that
any
savings
an
employer
receives
20
as
a
result
of
the
bill
should
be
used
for
at
least
one
of
21
the
purposes
specified
in
the
bill.
The
specified
purposes
22
are
to
pay
for
employee
salaries
or
benefits
or
to
use
as
an
23
alternative
to
unemployment
benefits
during
periods
of
seasonal
24
unemployment.
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