BILL NUMBER: S9904
SPONSOR: RAMOS
 
TITLE OF BILL:
An act to amend the labor law, in relation to moneys to be credited to
the general account of the unemployment insurance fund
 
PURPOSE OF THE BILL:
To add funds that are transferred to the State from the federal govern-
ment for the repayment of outstanding Unemployment Insurance (UI) Trust
Fund loans to the statutory list of credits in Labor Law §§ 577(1)(a)
that may be included in the UI General Account.
 
SUMMARY OF PROVISIONS:
This proposal would amend Labor Law 577(1)(a) to include the money
transferred to the State by 901 of the federal Social Security Act (42
U.S.C. 1101) for the repayment of outstanding UI Trust Fund loans to the
statutory list of funds that can be credited to the UI General Account.
 
JUSTIFICATION:
The UI General Account is one part of the UI Trust Fund. For context, an
employer's quarterly UI contributions are determined by three separate
tax rates:
1. The employer experience rate, which is based on the balance of the
overall UI Trust Fund and the balance of the employer's specific UI
account (Labor Law § 581),
2. The reemployment services rate (Labor Law § 581-b), and
3. The subsidiary rate, which is based on the balance of the UI General
Account and the balance of the employer's specific UI account (Labor Law
§ 577).
The UI General Account consists of credits and debits to the UI Trust
Fund that cannot be tied to a specific employer (Labor Law § 577(1)).
The list of credits includes money transferred to the State by 903 of
the federal Social Security Act (42 U.S.C. § 1103) but does not include
money transferred to the state by 901 of the federal Social Security
Act.
§ 901 of the federal Social Security Act authorizes a transfer of funds
to the State when the State has a UI Trust Fund deficit for more than
two years and the Federal Unemployment Tax Act credit for employers is
reduced. Specifically, the money that is generated from this credit
reduction is provided to the State and used to help pay down the State's
outstanding loan.
This money is transferred to the State in the aggregate and cannot be
attributed to a particular employer. Therefore, the money can only be
accounted for in the UI General Account. Labor Law § 577(1)(a) provides
an enumerated list of funds that can be credited to the UI General
Account, but the list does not include money credited to the State
pursuant to 901 of the federal Social Security Act. As a result, this
money received cannot be considered when the balance of the UI General
Account is calculated to determine the subsidiary contribution rate for
employers.
The UI General Account has been in the negative for many years, and as a
result the issue has not actually impacted the subsidiary contribution
rate. However, over the last several decades, the UI General Account has
been steadily increasing and the difference in the balance without the
money transferred by § 901 of the federal Social Security Act could
impact employer subsidiary contribution rates in the future, especially
as the health of the UI Trust Fund improves.
Therefore, Labor Law § 577 should be amended to include the money trans-
ferred by 901 of the federal Social Security Act in the list of funds
that can be credited to the UI General Account. This proposal would
amend Labor Law § 577 for this purpose.
 
PRIOR LEGISLATIVE HISTORY:
None. This would be a new bill.
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S9904: 577 labor law, 577(1) labor law