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Introduced by

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									BILL AS INTRODUCED 2000

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S.305 Introduced by Senator Shumlin of Windham County, Senator Backus of Chittenden County, Senator Illuzzi of Essex-Orleans County, Senator Ptashnik of Windsor County and Senator Rivers of Windsor County Referred to Committee on Date: Subject: Labor; unemployment compensation state reserve fund; unemployment tax reduction; parental leave; workforce training Statement of purpose: This bill would: (1) Reduce the unemployment insurance tax rates for all classes of employers by 0.1 percentage points for a three-year period. (2) Provide, that for a three-year period, employers’ unemployment compensation insurance tax payments be designated as state reserve contributions and diverted to a state reserve fund created for this purpose. (3) Provide that the principal amount in the state reserve fund be available for unemployment compensation payments, but that the interest on such funds shall be used by the commissioner for workforce improvement and training.

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(4) Establish a birth and adoption unemployment compensation program to provide benefits to parents on approved leave or who otherwise leave employment to be with their newborns or newly adopted children.

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AN ACT RELATING TO UNEMPLOYMENT COMPENSATION, PARENTAL LEAVE AND WORKFORCE TRAINING It is hereby enacted by the General Assembly of the State of Vermont: Sec. 1. FINDINGS AND PURPOSE (a) The General Assembly finds that: (1) The unemployment compensation fund, paid in part by Vermont taxpayers, is deposited in the U.S. Treasury and invested in federal instruments. (2) Both Vermont employers and employees could derive significant benefit if the monies paid into the unemployment compensation fund by Vermont employers were invested directly in Vermont in a state reserve fund, and the earnings on such investments used to support workforce development. (3) Ninety percent of Vermont employers have 20 or fewer workers, and many of these employers find that the lack of training available to their employees limits job advancement and business growth. (4) Vermont economic policy is to create more high skilled, high wage jobs. Therefore, the creation of an unemployment state reserve fund, to benefit
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Vermont employers and employees, would create a strong link between the state’s economic policy and funds to carry out that policy by providing education and training opportunities for Vermonters. (5) Birth and adoption unemployment compensation recognizes the impact of women in the workplace, and responds to the dramatic societal and economic changes resulting from the large number of families where both parents work. It supports a stable workforce by allowing parents to provide the initial care a child needs, to form a strong emotional bond with their child, and to establish a secure system of child care that, once in place, will promote the parents’ long-term attachment to the workforce. (6) The initial time period during which a new child is introduced into a home and how the child’s care will be assimilated into the working lives of parents is critical. (7) Many working Vermonters, especially those in low and moderate paying jobs, who need to take parental leave after birth or adoption of a child do not take leave from work because they cannot afford to. (b) The purpose of this act is to help Vermont workers by creating jobs as well as developing and maintaining workforce and skills necessary for Vermont employers and employees to compete in the world economy and to provide a real choice for employees who become parents by making wage replacement available to those for whom parental leave heretofore has been

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merely an illusory right, while still ensuring that Vermont has adequate monies to pay unemployment compensation benefits. Sec. 2. 21 V.S.A. § 1321a is added to read: § 132la. STATE RESERVE CONTRIBUTIONS All employers shall be liable to pay to the department state reserve contributions with respect to wages paid for employment. The amount of state reserve contributions for which an employer is liable shall be computed, utilizing the same base of contributions and under the same terms as set forth in sections 1321(b) and 1326 of this title. The sum of each employer’s contribution to the state reserve fund and contribution to the unemployment compensation fund shall not exceed the amount computed, using the rate applicable to that employer under section 1326(b), less 0.1 percentage point. In no event shall the contribution rate assigned to an employer in rate class 20 be less than 5.4 percent. All state reserve contributions collected, less the cost of collection, shall be deposited in the state reserve fund created in section 1362a of this title, and shall be extended for the purposes and in the manner set forth in that section. Sec. 3. 21 V.S.A. § 1326(d) and (f) are amended to read: (d) The commissioner shall compute a current fund ratio, and a highest benefit cost rate, as follows:

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(1) the current fund ratio shall be determined by dividing the sum of the available balance of in the unemployment compensation fund and the state reserve fund on December 31 of the preceding calendar year by the total wages paid for employment during the said calendar year as reported by employers by the following March 31; (2) the highest benefit cost rate shall be determined by dividing the highest amount of benefit payments made during a consecutive twelve month 12-month period which ended within the ten year 10-year period ended with the preceding December 31, by the total wages paid during the four calendar quarter periods which ended within such twelve month 12-month period. (f) The contribution rate to become effective July 1, 1977 and thereafter, on July 1 of each year, shall be the rate determined for that class into which the given employer is placed by application of this section. For rate years beginning July 1, 2000, and ending June 30, 2003, the contribution rate for employers in rate classes 0 through 12 shall be zero; in rate classes 13 through 17 shall be 1.8 percent; in rate classes 18 and 19 shall be 3.6 percent; and in rate class 20 shall be 5.4 percent. Thereafter, on July 1 of each year, it shall be the rate determined for the class in which an employer is placed by application of this section.

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Sec. 4. 21 V.S.A. § 1362a is added to read: § 1362a. STATE RESERVE FUND (a) There is hereby created a special fund to be known as the unemployment compensation state reserve fund. The state treasurer, in consultation with the commissioner, shall invest the monies deposited in this fund until such time as the commissioner determines that they are needed to pay unemployment compensation benefits. (b) Interest earned on the monies deposited in the state reserve fund shall be continuously available to the commissioner to improve the skills of Vermont’s workforce. (c) The commissioner shall use criteria developed by the human resources investment council when allocating monies from the state reserve fund for education or training. (d) The monies in the state reserve fund shall not be used to replace federal funds. Sec. 5. 21 V.S.A. § 1343a is added to read: § 1343a. BIRTH AND ADOPTION UNEMPLOYMENT COMPENSATION (a) An individual who is on leave of absence from his or her employer or who left employment to be with the individual’s child during the first year of life, or during the first year following placement with the individual for adoption, shall not be denied compensation under subdivision 1334(a)(2)(A) of

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this title for voluntarily leaving employment, subsection 1343(a) of this title, relating to availability for work, subdivision 1344(a)(3), relating to inability to work, or subsection 1343(a) for failure to actively seek work. (b) Subdivision 1344(a)(5) of this title, concerning the reduction of the amount of compensation due to receipt of disqualifying income, shall apply to payments under this section. In addition, the following payments shall cause a reduction in the compensation amount: (1) any payment from the employer resulting from a birth described in subsection (a) of this section; and (2) any payment from a birth or adoption described in subsection (a) of this section from a disability insurance plan contributed to by an employer, in proportion to the employer’s contribution to such plan. (c) Compensation is payable to an individual under this section for a maximum of 12 weeks with respect to any birth or placement for adoption. (d) Each employer shall post at each site operated by the employer, in a conspicuous place, accessible to all employees, information relating to the availability of birth and adoption unemployment compensation. (e) Any compensation paid under this section shall not be charged to the account of the individual employer. (f) On or before January 15, 2003, the commissioner of employment and training shall issue a report to the governor and the general assembly,

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evaluating the effectiveness of the birth and adoption unemployment compensation program. (g) This section shall be applied consistently with regulations issued by the U.S. Department of Labor. Sec. 6. EFFECTIVE DATE AND TERMINATION (a) This act shall take effect July 1, 2000, except that Sec. 5, establishing a birth and adoption unemployment compensation program, shall take effect July 1, 2000 or on the effective date of regulations adopted by the U.S. Department of Labor implementing a birth and adoption unemployment compensation program, whichever is later. (b) All provisions of this act shall terminate on June 30, 2003. On that date, 21 V.S.A. § 1321a, relating to state reserve contributions, 21 V.S.A. § 1362a, relating to a state reserve fund, and 21 V.S.A. § 1362a, relating to a birth and adoption unemployment compensation program, are repealed, and the unemployment insurance tax rates for all classes of employers shall revert to those in effect prior to the effective date of this act.

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