SF 1320

as introduced - 89th Legislature (2015 - 2016) Posted on 03/05/2015 08:43am

A bill for an act
relating to economic development; reducing the unemployment insurance
employer tax rate under certain conditions; amending Minnesota Statutes 2014,
sections 268.035, subdivision 24; 268.051, subdivision 2, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2014, section 268.035, subdivision 24, is amended to read:

Subd. 24.

Taxable wages.

(a) new text begin Except when section 268.051, subdivision 2a,
applies, new text end "taxable wages" means those wages paid to an employee in covered employment
each calendar year up to an amount equal to 60 percent of the state's average annual
wage, rounded to the nearest $1,000.

(b) Taxable wages includes the amount of wages paid for covered employment by
the employer's predecessor when there has been an experience rating history transfer
under section 268.051, subdivision 4.

Sec. 2.

Minnesota Statutes 2014, 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. new text begin Except as provided
in subdivision 2a, new text end 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) five-tenths of 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. 3.

Minnesota Statutes 2014, section 268.051, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Tax rate and taxable wage reduction. new text end

new text begin (a) Notwithstanding section
268.035, subdivision 24, the amount of taxable wages for the calendar year is reduced by
12 percent of the amount otherwise computed rounded down to the next lower $1,000.
new text end

new text begin (b) Notwithstanding subdivision 2, the base tax rate for the calendar year is reduced
to 0.07 percent.
new text end

new text begin (c) Paragraphs (a) and (b) only take effect for the calendar year if, on the prior March
31 and on the prior September 30, the Minnesota unemployment insurance trust fund had
a balance of more than 0.75 percent of total wages paid in covered employment. Total
wages paid in covered employment is determined under subdivision 2, paragraph (e).
new text end