Bill Text: MN SF734 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Unemployment insurance base rate and maximum experience rating provisions modification
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2011-03-10 - Referred to Jobs and Economic Growth [SF734 Detail]
Download: Minnesota-2011-SF734-Introduced.html
1.2relating to unemployment insurance; modifying base rate and maximum
1.3experience rating provisions; amending Minnesota Statutes 2010, section
1.4268.051, subdivisions 2, 3.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 268.051, subdivision 2, is amended to read:
1.7 Subd. 2. Computation of tax rates; additional assessments. (a) For each calendar
1.8year the commissioner must compute the tax rate of each taxpaying employer that qualifies
1.9for an experience rating by adding the base tax rate to the employer's experience rating
1.10along with assigning any appropriate additional assessment under paragraph (c).
1.11 (b) The base tax rate for the calendar year and any additional assessments under this
1.12subdivision are determined based upon the amount in the trust fund on March 31 of the
1.13prior year as a percentage of total wages paid in covered employment. The base tax rate is:
1.14 (1) one-tenth of one percent if the trust fund is equal to or more than 0.75 percent;
1.15 (2) two-tenths of one percent if the trust fund is less than 0.75 percent but equal to or
1.16more than 0.65 percent;
1.17 (3) three-tenths of one percent if the trust fund is less than 0.65 percent but equal to
1.18or more than 0.55 percent;
1.19 (4) four-tenths of one percent if the trust fund is less than 0.55 percent, but has a
1.20positive balance; or
1.21(5)five-tenths of one percent if the trust fund has a negative balance and is
1.22borrowing from the federal unemployment trust fund in order to pay unemployment
1.23benefits as provided for under section268.194, subdivision 6 .
2.1 (c) In addition to the base tax rate, there is an additional assessment for the calendar
2.2year on the quarterly unemployment taxes due from every taxpaying employer if the
2.3amount in the trust fund on March 31 of the prior year is less than 0.55 percent of total
2.4wages paid in covered employment. The assessment is as follows:
2.5 (1) a five percent assessment if the trust fund is less than 0.55 percent but equal to or
2.6more than 0.45 percent;
2.7 (2) a ten percent assessment if the trust fund is less than 0.45 percent but equal
2.8to or more than 0.35 percent; or
2.9 (3) a 14 percent assessment if the trust fund is less than 0.35 percent.
2.10 (d) For the purposes of this subdivision, the trust fund does not include any money
2.11borrowed from the federal unemployment trust fund provided for in section268.194,
2.12subdivision 6 .
2.13 (e) For the purposes of this subdivision, total wages paid in covered employment are
2.14those wages paid to all employees in covered employment during the calendar year before
2.15the March 31 date used in paragraph (b).
2.16 (f) The base tax rate and any additional assessments are assessed on all taxpaying
2.17employers to cover a portion of the costs to the trust fund for unemployment benefits paid
2.18that do not affect any single employer's future experience rating because:
2.19 (1) the employer's experience rating is limited by the maximum under subdivision 3,
2.20paragraph (b);
2.21 (2) the employer has ceased doing business; or
2.22 (3) the unemployment benefits paid have been determined not to be used in
2.23computing the employer's experience rating under section268.047, subdivision 2 or 3.
2.24 Sec. 2. Minnesota Statutes 2010, section 268.051, subdivision 3, is amended to read:
2.25 Subd. 3. Computation of a taxpaying employer's experience rating. (a) On or
2.26before each December 15, the commissioner must compute an experience rating for each
2.27taxpaying employer who has been required to file wage detail reports for the 12 calendar
2.28months ending on the prior June 30. The experience rating computed is applicable for the
2.29following calendar year.
2.30 The experience rating is the ratio obtained by dividing 125 percent of the total
2.31unemployment benefits required under section268.047 to be used in computing the
2.32employer's tax rate during the 48 calendar months ending on the prior June 30, by the
2.33employer's total taxable payroll for that same period.
2.34 (b) The experience rating is computed to the nearest one-hundredth of a percent, to
2.35a maximum of8.90
3.1 (c) The use of 125 percent of unemployment benefits paid under paragraph (a), rather
3.2than 100 percent of the amount of unemployment benefits paid, is done in order for the
3.3trust fund to recover from all taxpaying employers a portion of the costs of unemployment
3.4benefits paid that do not affect any individual employer's future experience rating because
3.5of the reasons set out in subdivision 2, paragraph (f).
1.3experience rating provisions; amending Minnesota Statutes 2010, section
1.4268.051, subdivisions 2, 3.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2010, section 268.051, subdivision 2, is amended to read:
1.7 Subd. 2. Computation of tax rates; additional assessments. (a) For each calendar
1.8year the commissioner must compute the tax rate of each taxpaying employer that qualifies
1.9for an experience rating by adding the base tax rate to the employer's experience rating
1.10along with assigning any appropriate additional assessment under paragraph (c).
1.11 (b) The base tax rate for the calendar year and any additional assessments under this
1.12subdivision are determined based upon the amount in the trust fund on March 31 of the
1.13prior year as a percentage of total wages paid in covered employment. The base tax rate is:
1.14 (1) one-tenth of one percent if the trust fund is equal to or more than 0.75 percent;
1.15 (2) two-tenths of one percent if the trust fund is less than 0.75 percent but equal to or
1.16more than 0.65 percent;
1.17 (3) three-tenths of one percent if the trust fund is less than 0.65 percent but equal to
1.18or more than 0.55 percent;
1.19 (4) four-tenths of one percent if the trust fund is less than 0.55 percent, but has a
1.20positive balance; or
1.21(5)
1.22borrowing from the federal unemployment trust fund in order to pay unemployment
1.23benefits as provided for under section
2.1 (c) In addition to the base tax rate, there is an additional assessment for the calendar
2.2year on the quarterly unemployment taxes due from every taxpaying employer if the
2.3amount in the trust fund on March 31 of the prior year is less than 0.55 percent of total
2.4wages paid in covered employment. The assessment is as follows:
2.5 (1) a five percent assessment if the trust fund is less than 0.55 percent but equal to or
2.6more than 0.45 percent;
2.7 (2) a ten percent assessment if the trust fund is less than 0.45 percent but equal
2.8to or more than 0.35 percent; or
2.9 (3) a 14 percent assessment if the trust fund is less than 0.35 percent.
2.10 (d) For the purposes of this subdivision, the trust fund does not include any money
2.11borrowed from the federal unemployment trust fund provided for in section
2.12subdivision 6
2.13 (e) For the purposes of this subdivision, total wages paid in covered employment are
2.14those wages paid to all employees in covered employment during the calendar year before
2.15the March 31 date used in paragraph (b).
2.16 (f) The base tax rate and any additional assessments are assessed on all taxpaying
2.17employers to cover a portion of the costs to the trust fund for unemployment benefits paid
2.18that do not affect any single employer's future experience rating because:
2.19 (1) the employer's experience rating is limited by the maximum under subdivision 3,
2.20paragraph (b);
2.21 (2) the employer has ceased doing business; or
2.22 (3) the unemployment benefits paid have been determined not to be used in
2.23computing the employer's experience rating under section
2.24 Sec. 2. Minnesota Statutes 2010, section 268.051, subdivision 3, is amended to read:
2.25 Subd. 3. Computation of a taxpaying employer's experience rating. (a) On or
2.26before each December 15, the commissioner must compute an experience rating for each
2.27taxpaying employer who has been required to file wage detail reports for the 12 calendar
2.28months ending on the prior June 30. The experience rating computed is applicable for the
2.29following calendar year.
2.30 The experience rating is the ratio obtained by dividing 125 percent of the total
2.31unemployment benefits required under section
2.32employer's tax rate during the 48 calendar months ending on the prior June 30, by the
2.33employer's total taxable payroll for that same period.
2.34 (b) The experience rating is computed to the nearest one-hundredth of a percent, to
2.35a maximum of
3.1 (c) The use of 125 percent of unemployment benefits paid under paragraph (a), rather
3.2than 100 percent of the amount of unemployment benefits paid, is done in order for the
3.3trust fund to recover from all taxpaying employers a portion of the costs of unemployment
3.4benefits paid that do not affect any individual employer's future experience rating because
3.5of the reasons set out in subdivision 2, paragraph (f).
