Bill Text: IL HB3537 | 2015-2016 | 99th General Assembly | Introduced

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Bill Title: Amends the Unemployment Insurance Act. Provides for a reduction in the employer's contribution rate in the amount of 0.1% annually. Provides for a surcharge upon employers in the amount of 0.1% to be deposited into the 21st Century Workforce Development Fund.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2015-02-26 - Referred to Rules Committee [HB3537 Detail]

Download: Illinois-2015-HB3537-Introduced.html

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99TH GENERAL ASSEMBLY State of Illinois 2015 and 2016 HB3537 Introduced , by Rep. Esther Golar SYNOPSIS AS INTRODUCED:
820 ILCS 405/1500 from Ch. 48, par. 570
820 ILCS 405/1506.1 from Ch. 48, par. 576.1
820 ILCS 405/1506.6
820 ILCS 405/1506.7 new
820 ILCS 405/2100 from Ch. 48, par. 660
Amends the Unemployment Insurance Act. Provides for a reduction in the employer's contribution rate in the amount of 0.1% annually. Provides for a surcharge upon employers in the amount of 0.1% to be deposited into the 21st Century Workforce Development Fund.
LRB099 09387 JLS 29594 b
FISCAL NOTE ACT MAY APPLY
A BILL FOR
HB3537 LRB099 09387 JLS 29594 b
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 Sections 1500, 1506.1, 1506.6, and 2100 and by adding
Section 1506.7 as follows:
(820 ILCS 405/1500) (from Ch. 48, par. 570)
Sec. 1500. Rate of contribution.
A. For the six months' period beginning July 1, 1937, and
for each of the calendar years 1938 to 1959, inclusive, each
employer shall pay contributions on wages at the percentages
specified in or determined in accordance with the provisions of
this Act as amended and in effect on July 11, 1957.
B. For the calendar years 1960 through 1983, each employer
shall pay contributions equal to 2.7 percent with respect to
wages for insured work paid during each such calendar year,
except that the contribution rate 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
as provided in Sections 1501 to 1507, inclusive.
For the calendar year 1984 and each calendar year
thereafter, each employer shall pay contributions at a

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percentage rate equal to the greatest of 2.7%, or 2.7%
multiplied by the current adjusted State experience factor, as
determined for each calendar year by the Director in accordance
with the provisions of Sections 1504 and 1505, or the average
contribution rate for his major classification in the Standard
Industrial Code, or another classification sanctioned by the
United States Department of Labor and prescribed by the
Director by rule, with respect to wages for insured work paid
during such year. The Director of Employment Security shall
determine for calendar year 1984 and each calendar year
thereafter by a method pursuant to adopted rules each
individual employer's industrial code and the average
contribution rate for each major classification in the Standard
Industrial Code, or each other classification sanctioned by the
United States Department of Labor and prescribed by the
Director by rule. Notwithstanding the preceding provisions of
this paragraph, 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, and the contribution rate for calendar
year 1987 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
determined as provided in Sections 1501 to 1507.1, inclusive.

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Provided, however, that the contribution rate for calendar
years 1989 and 1990 of each employer who has had experience
with the risk of unemployment for at least 13 consecutive
months ending June 30 of the preceding calendar year shall be a
rate determined in accordance with this Section or a rate
determined as if it had been calculated in accordance with
Sections 1501 through 1507, inclusive, whichever is greater,
except that for purposes of calculating the benefit wage ratio
as provided in Section 1503, such benefit wage ratio shall be a
percentage equal to the total of benefit wages for the 12
consecutive calendar month period ending on the above preceding
June 30, divided by the total wages for insured work subject to
the payment of contributions under Sections 234, 235 and 245
for the same period and provided, further, however, that the
contribution rate for calendar year 1991 and for each calendar
year thereafter of each employer who has had experience with
the risk of unemployment for at least 13 consecutive months
ending June 30 of the preceding calendar year shall be a rate
determined in accordance with this Section or a rate determined
as if it had been calculated in accordance with Sections 1501
through 1507.1, inclusive, whichever is greater, except that
for purposes of calculating the benefit ratio as provided in
Section 1503.1, such benefit ratio shall be a percentage equal
to the total of benefit charges for the 12 consecutive calendar
month period ending on the above preceding June 30, multiplied
by the benefit conversion factor applicable to such year,

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divided by the total wages for insured work subject to the
payment of contributions under Sections 234, 235 and 245 for
the same period.
B-1. Notwithstanding any other provision of this Section,
for calendar year 2015 and each calendar year thereafter, an
employer's contribution rate as determined pursuant to
subsection B shall be reduced by 0.1% absolute. This amendatory
Act of the 99th General Assembly has no effect on the fund
building rate determined pursuant to Section 1506.3 or fund
building receipts attributable to the fund building rate.
C. Except as expressly provided in this Act, the provisions
of Sections 1500 to 1510, inclusive, do not apply to any
nonprofit organization for any period with respect to which it
does not incur liability for the payment of contributions by
reason of having elected to make payments in lieu of
contributions, or to any political subdivision or municipal
corporation for any period with respect to which it is not
subject to payments in lieu of contributions under the
provisions of paragraph 1 of Section 302C by reason of having
elected to make payments in lieu of contributions under
paragraph 2 of that Section or to any governmental entity
referred to in clause (B) of Section 211.1. Wages paid to an
individual which are subject to contributions under Section
1405 A, or on the basis of which benefits are paid to him which
are subject to payment in lieu of contributions under Sections
1403, 1404, or 1405 B, or under paragraph 2 of Section 302C,

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shall not become benefit wages or benefit charges under the
provisions of Sections 1501 or 1501.1, respectively, except for
purposes of determining a rate of contribution for 1984 and
each calendar year thereafter for any governmental entity
referred to in clause (B) of Section 211.1 which does not elect
to make payments in lieu of contributions.
D. If an employer's business is closed solely because of
the entrance of one or more of the owners, partners, officers,
or the majority stockholder into the armed forces of the United
States, or of any of its allies, or of the United Nations, and,
if the business is resumed within two years after the discharge
or release of such person or persons from active duty in the
armed forces, the employer will be deemed to have incurred
liability for the payment of contributions continuously
throughout such period. Such an employer, for the purposes of
Section 1506.1, will be deemed to have paid contributions upon
wages for insured work during the applicable period specified
in Section 1503 on or before the date designated therein,
provided that no wages became benefit wages during the
applicable period specified in Section 1503.
(Source: P.A. 94-301, eff. 1-1-06.)
(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

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1991 of each employer whose contribution rate is determined as
provided in Sections 1501 through 1507, inclusive, shall be
determined in accordance with the provisions of this Act as
amended and in effect on November 18, 2011.
B. (Blank).
C. (Blank).
D. (Blank).
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. An employer's minimum
contribution rate shall be 0.0% for calendar years 2012
through 2019.
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.

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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.
F. (Blank).
G. Notwithstanding the other provisions of this Section, no

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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.
H. Notwithstanding any other provision of this Section, for
calendar year 2015 and each calendar year thereafter, an
employer's contribution rate as determined pursuant to this
Section, without regard to this subsection, shall be reduced by
0.1% absolute but not below 0.0%. This amendatory Act of the
99th General Assembly has no effect on the fund building rate
determined pursuant to Section 1506.3 or fund building receipts
attributable to the fund building rate.
(Source: P.A. 97-621, eff. 11-18-11; 97-791, eff. 1-1-13.)
(820 ILCS 405/1506.6)
Sec. 1506.6. Surcharge; specified period. For each
employer whose contribution rate for calendar year 2016 or 2018
is determined pursuant to Section 1500 or 1506.1, including but
not limited to an employer whose contribution rate pursuant to
Section 1506.1 is 0.0%, in addition to the contribution rate
established pursuant to Section 1506.3 and the surcharge
established pursuant to Section 1506.7, an additional
surcharge of 0.3% shall be added to the contribution rate. The
surcharge established by this Section shall be due at the same

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time as other contributions with respect to the quarter are
due, as provided in Section 1400. Payments attributable to the
surcharge established pursuant to this Section shall be
contributions and deposited into the clearing account.
(Source: P.A. 97-621, eff. 11-18-11.)
(820 ILCS 405/1506.7 new)
Sec. 1506.7. Surcharge. For calendar _year 2015 and each
calendar year thereafter, each employer shall pay a surcharge
equal to 0.1% of the total wages for insured work subject to
the payment of contributions under Sections 234, 235, and 245.
The surcharge established by this Section shall be due at the
same time as contributions are due, as provided in Section
1400. Notwithstanding any other provision to the contrary, with
respect to an employer whose contribution rate, with respect to
calendar year 2015 and each calendar year thereafter calculated
without regard to this amendatory Act of the 99th General
Assembly, would have exceeded 5.4% but for the 5.4% rate
ceiling imposed pursuant to subsection A of Section 1506.3, the
amount due from the employer with respect to that quarter and
attributable to the surcharge established pursuant to this
Section shall equal the amount, if any, by which the amount due
and attributable to the 5.4% rate exceeds the amount that would
have been due and attributable to the employer's rate
determined pursuant to Sections 1500, 1506.1, and 1506.3.
Payments received by the Department with respect to the first

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quarter of calendar year 2015 and any calendar quarter
thereafter shall, to the extent they are insufficient to pay
the total amount due under this Act with respect to the
quarter, be first applied to satisfy the amount due with
respect to that quarter and attributable to the employer's rate
determined pursuant to Sections 1500, 1506.1, 1506.3, and
1506.6 and then applied to satisfy the amount due with respect
to that quarter and attributable to the surcharge established
pursuant to this Section. All provisions of this Act applicable
to the collection or refund of any contribution due under this
Act shall be applicable to the collection or refund of amounts
due pursuant to this Section. Interest shall accrue with
respect to amounts due pursuant to this Section to the same
extent and under the same terms and conditions as provided by
Section 1401 with respect to contributions.
(820 ILCS 405/2100) (from Ch. 48, par. 660)
Sec. 2100. Handling of funds - Bond - Accounts.
A. All contributions and payments in lieu of contributions
collected under this Act, including but not limited to fund
building receipts and receipts attributable to the surcharges
surcharge established pursuant to Sections Section 1506.5 and
1506.7, together with any interest thereon; all penalties
collected pursuant to this Act; any property or securities
acquired through the use thereof; all moneys advanced to this
State's account in the unemployment trust fund pursuant to the

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provisions of Title XII of the Social Security Act, as amended;
all moneys directed for transfer from the Master Bond Fund or
the Title XII Interest Fund to this State's account in the
unemployment trust fund; all moneys received from the Federal
government as reimbursements pursuant to Section 204 of the
Federal-State Extended Unemployment Compensation Act of 1970,
as amended; all moneys credited to this State's account in the
unemployment trust fund pursuant to Section 903 of the Federal
Social Security Act, as amended; all administrative fees
collected from individuals pursuant to Section 900 or from
employing units pursuant to Section 2206.1; and all earnings of
such property or securities and any interest earned upon any
such moneys shall be paid or turned over to the Department and
held by the Director, as ex-officio custodian of the clearing
account, the unemployment trust fund account and the benefit
account, and by the State Treasurer, as ex-officio custodian of
the special administrative account, separate and apart from all
public moneys or funds of this State, as hereinafter provided.
Such moneys shall be administered by the Director exclusively
for the purposes of this Act.
No such moneys shall be paid or expended except upon the
direction of the Director in accordance with such regulations
as he shall prescribe pursuant to the provisions of this Act.
The State Treasurer shall be liable on his general official
bond for the faithful performance of his duties in connection
with the moneys in the special administrative account provided

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for under this Act. Such liability on his official bond shall
exist in addition to the liability upon any separate bond given
by him. All sums recovered for losses sustained by the account
shall be deposited in that account.
The Director shall be liable on his general official bond
for the faithful performance of his duties in connection with
the moneys in the clearing account, the benefit account and
unemployment trust fund account provided for under this Act.
Such liability on his official bond shall exist in addition to
the liability upon any separate bond given by him. All sums
recovered for losses sustained by any one of the accounts shall
be deposited in the account that sustained such loss.
The Treasurer shall maintain for such moneys a special
administrative account. The Director shall maintain for such
moneys 3 separate accounts: a clearing account, a benefit
account, and an unemployment trust fund account. All moneys
payable under this Act (except moneys requisitioned from this
State's account in the unemployment trust fund and deposited in
the benefit account and moneys directed for deposit into the
Special Programs Fund provided for under Section 2107),
including but not limited to moneys directed for transfer from
the Master Bond Fund or the Title XII Interest Fund to this
State's account in the unemployment trust fund, upon receipt
thereof, shall be immediately deposited in the clearing
account; provided, however, that, except as is otherwise
provided in this Section, interest and penalties shall not be

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deemed a part of the clearing account but shall be transferred
immediately upon clearance thereof to the special
administrative account; further provided that an amount not to
exceed $90,000,000 in payments attributable to the surcharge
established pursuant to Section 1506.5, including any interest
thereon, shall not be deemed a part of the clearing account but
shall be transferred immediately upon clearance thereof to the
Title XII Interest Fund; further provided that payments
attributable to the surcharge established pursuant to Section
1506.7, including any interest thereon, shall not be deemed a
part of the clearing account but shall be transferred
immediately upon clearance thereof to the 21st Century
Workforce Development Fund.
After clearance thereof, all other moneys in the clearing
account shall be immediately deposited by the Director with the
Secretary of the Treasury of the United States of America to
the credit of the account of this State in the unemployment
trust fund, established and maintained pursuant to the Federal
Social Security Act, as amended, except fund building receipts,
which shall be deposited into the Master Bond Fund. The benefit
account shall consist of all moneys requisitioned from this
State's account in the unemployment trust fund. The moneys in
the benefit account shall be expended in accordance with
regulations prescribed by the Director and solely for the
payment of benefits, refunds of contributions, interest and
penalties under the provisions of the Act, the payment of

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health insurance in accordance with Section 410 of this Act,
and the transfer or payment of funds to any Federal or State
agency pursuant to reciprocal arrangements entered into by the
Director under the provisions of Section 2700E, except that
moneys credited to this State's account in the unemployment
trust fund pursuant to Section 903 of the Federal Social
Security Act, as amended, shall be used exclusively as provided
in subsection B. For purposes of this Section only, to the
extent allowed by applicable legal requirements, the payment of
benefits includes but is not limited to the payment of
principal on any bonds issued pursuant to the Illinois
Unemployment Insurance Trust Fund Financing Act, exclusive of
any interest or administrative expenses in connection with the
bonds. The Director shall, from time to time, requisition from
the unemployment trust fund such amounts, not exceeding the
amounts standing to the State's account therein, as he deems
necessary solely for the payment of such benefits, refunds, and
funds, for a reasonable future period. The Director, as
ex-officio custodian of the benefit account, which shall be
kept separate and apart from all other public moneys, shall
issue payment of such benefits, refunds, health insurance and
funds solely from the moneys so received into the benefit
account. However, after January 1, 1987, no payment shall be
drawn on such benefit account unless at the time of drawing
there is sufficient money in the account to make the payment.
The Director shall retain in the clearing account an amount of

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interest and penalties equal to the amount of interest and
penalties to be refunded from the benefit account. After
clearance thereof, the amount so retained shall be immediately
deposited by the Director, as are all other moneys in the
clearing account, with the Secretary of the Treasury of the
United States. If, at any time, an insufficient amount of
interest and penalties is available for retention in the
clearing account, no refund of interest or penalties shall be
made from the benefit account until a sufficient amount is
available for retention and is so retained, or until the State
Treasurer, upon the direction of the Director, transfers to the
Director a sufficient amount from the special administrative
account, for immediate deposit in the benefit account.
Any balance of moneys requisitioned from the unemployment
trust fund which remains unclaimed or unpaid in the benefit
account after the expiration of the period for which such sums
were requisitioned shall either be deducted from estimates of
and may be utilized for authorized expenditures during
succeeding periods, or, in the discretion of the Director,
shall be redeposited with the Secretary of the Treasury of the
United States to the credit of the State's account in the
unemployment trust fund.
Moneys in the clearing, benefit and special administrative
accounts shall not be commingled with other State funds but
they shall be deposited as required by law and maintained in
separate accounts on the books of a savings and loan

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association or bank.
No bank or savings and loan association shall receive
public funds as permitted by this Section, unless it has
complied with the requirements established pursuant to Section
6 of "An Act relating to certain investments of public funds by
public agencies", approved July 23, 1943, as now or hereafter
amended.
B. Moneys credited to the account of this State in the
unemployment trust fund by the Secretary of the Treasury of the
United States pursuant to Section 903 of the Social Security
Act may be requisitioned from this State's account and used as
authorized by Section 903. Any interest required to be paid on
advances under Title XII of the Social Security Act shall be
paid in a timely manner and shall not be paid, directly or
indirectly, by an equivalent reduction in contributions or
payments in lieu of contributions from amounts in this State's
account in the unemployment trust fund. Such moneys may be
requisitioned and used for the payment of expenses incurred for
the administration of this Act, but only pursuant to a specific
appropriation by the General Assembly and only if the expenses
are incurred and the moneys are requisitioned after the
enactment of an appropriation law which:
1. Specifies the purpose or purposes for which such
moneys are appropriated and the amount or amounts
appropriated therefor;
2. Limits the period within which such moneys may be

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obligated to a period ending not more than 2 years after
the date of the enactment of the appropriation law; and
3. Limits the amount which may be obligated during any
fiscal year to an amount which does not exceed the amount
by which (a) the aggregate of the amounts transferred to
the account of this State pursuant to Section 903 of the
Social Security Act exceeds (b) the aggregate of the
amounts used by this State pursuant to this Act and charged
against the amounts transferred to the account of this
State.
For purposes of paragraph (3) above, amounts obligated for
administrative purposes pursuant to an appropriation shall be
chargeable against transferred amounts at the exact time the
obligation is entered into. The appropriation, obligation, and
expenditure or other disposition of money appropriated under
this subsection shall be accounted for in accordance with
standards established by the United States Secretary of Labor.
Moneys appropriated as provided herein for the payment of
expenses of administration shall be requisitioned by the
Director as needed for the payment of obligations incurred
under such appropriation. Upon requisition, such moneys shall
be deposited with the State Treasurer, who shall hold such
moneys, as ex-officio custodian thereof, in accordance with the
requirements of Section 2103 and, upon the direction of the
Director, shall make payments therefrom pursuant to such
appropriation. Moneys so deposited shall, until expended,

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remain a part of the unemployment trust fund and, if any will
not be expended, shall be returned promptly to the account of
this State in the unemployment trust fund.
C. The Governor is authorized to apply to the United States
Secretary of Labor for an advance or advances to this State's
account in the unemployment trust fund pursuant to the
conditions set forth in Title XII of the Federal Social
Security Act, as amended. The amount of any such advance may be
repaid from this State's account in the unemployment trust
fund.
D. The Director shall annually on or before the first day
of March report in writing to the Employment Security Advisory
Board concerning the deposits into and expenditures from this
State's account in the Unemployment Trust Fund.
(Source: P.A. 97-1, eff. 3-31-11; 97-621, eff. 11-18-11;
97-791, eff. 1-1-13.)