SF 734

as introduced - 87th Legislature (2011 - 2012) Posted on 02/23/2012 09:13am

A bill for an act
relating to unemployment insurance; modifying base rate and maximum
experience rating provisions; amending Minnesota Statutes 2010, section
268.051, subdivisions 2, 3.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2010, section 268.051, subdivision 2, is amended to read:

Subd. 2.

Computation of tax rates; additional assessments.

(a) For each calendar
year the commissioner must compute the tax rate of each taxpaying employer that qualifies
for an experience rating by adding the base tax rate to the employer's experience rating
along with assigning any appropriate additional assessment under paragraph (c).

(b) The base tax rate for the calendar year and any additional assessments under this
subdivision are determined based upon the amount in the trust fund on March 31 of the
prior year as a percentage of total wages paid in covered employment. The base tax rate is:

(1) one-tenth of one percent if the trust fund is equal to or more than 0.75 percent;

(2) two-tenths of one percent if the trust fund is less than 0.75 percent but equal to or
more than 0.65 percent;

(3) three-tenths of one percent if the trust fund is less than 0.65 percent but equal to
or more than 0.55 percent;

(4) four-tenths of one percent if the trust fund is less than 0.55 percent, but has a
positive balance; or

(5) deleted text begin five-tenths of deleted text end one percent if the trust fund has a negative balance and is
borrowing from the federal unemployment trust fund in order to pay unemployment
benefits as provided for under section 268.194, subdivision 6.

(c) In addition to the base tax rate, there is an additional assessment for the calendar
year on the quarterly unemployment taxes due from every taxpaying employer if the
amount in the trust fund on March 31 of the prior year is less than 0.55 percent of total
wages paid in covered employment. The assessment is as follows:

(1) a five percent assessment if the trust fund is less than 0.55 percent but equal to or
more than 0.45 percent;

(2) a ten percent assessment if the trust fund is less than 0.45 percent but equal
to or more than 0.35 percent; or

(3) a 14 percent assessment if the trust fund is less than 0.35 percent.

(d) For the purposes of this subdivision, the trust fund does not include any money
borrowed from the federal unemployment trust fund provided for in section 268.194,
subdivision 6.

(e) For the purposes of this subdivision, total wages paid in covered employment are
those wages paid to all employees in covered employment during the calendar year before
the March 31 date used in paragraph (b).

(f) The base tax rate and any additional assessments are assessed on all taxpaying
employers to cover a portion of the costs to the trust fund for unemployment benefits paid
that do not affect any single employer's future experience rating because:

(1) the employer's experience rating is limited by the maximum under subdivision 3,
paragraph (b);

(2) the employer has ceased doing business; or

(3) the unemployment benefits paid have been determined not to be used in
computing the employer's experience rating under section 268.047, subdivision 2 or 3.

Sec. 2.

Minnesota Statutes 2010, section 268.051, subdivision 3, is amended to read:

Subd. 3.

Computation of a taxpaying employer's experience rating.

(a) On or
before each December 15, the commissioner must compute an experience rating for each
taxpaying employer who has been required to file wage detail reports for the 12 calendar
months ending on the prior June 30. The experience rating computed is applicable for the
following calendar year.

The experience rating is the ratio obtained by dividing 125 percent of the total
unemployment benefits required under section 268.047 to be used in computing the
employer's tax rate during the 48 calendar months ending on the prior June 30, by the
employer's total taxable payroll for that same period.

(b) The experience rating is computed to the nearest one-hundredth of a percent, to
a maximum of deleted text begin 8.90 deleted text end new text begin 4.5 new text end percent.

(c) The use of 125 percent of unemployment benefits paid under paragraph (a), rather
than 100 percent of the amount of unemployment benefits paid, is done in order for the
trust fund to recover from all taxpaying employers a portion of the costs of unemployment
benefits paid that do not affect any individual employer's future experience rating because
of the reasons set out in subdivision 2, paragraph (f).