HCS SCS SB 319 -- UNEMPLOYMENT INSURANCE

SPONSOR:  Koster (Roark)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Workforce
Development and Workplace Safety by a vote of 7 to 6.

This substitute changes the laws regarding unemployment
insurance.  The substitute:

(1)  Requires that for calendar year 2006 and thereafter, if on
September 30 the net balance in the Unemployment Compensation
Trust Fund is at least $400 million, the taxable wage base will
not increase above $11,000;

(2)  Requires that for initial unemployment claims filed during
the calendar year 2006 and thereafter, the maximum weekly benefit
amount will be 3.75% of the average of the two highest earnings
quarters of the worker's base period;

(3)  Requires that for calender year 2006 and thereafter, if the
fund's net balance is $400 million or less, the maximum weekly
benefit amount will not exceed $250.  Beginning January 1 of the
year following the year in which the fund's net balance is $400
million or more, the maximum weekly benefit amount will be $270.
For each subsequent year in which the fund's net balance is $400
million or more, the maximum weekly benefit amount will increase
by $10, not to exceed a maximum weekly benefit amount of $320.
The fund's net balance will be the balance less any obligations
as of September 30 of the preceding year;

(4)  Requires that alcohol and controlled substance testing be
conducted by accrediting organizations, certifying organizations,
or any professional society approved by the United States
Department of Transportation;

(5)  Requires that the policy, public posting, collective
bargaining agreement, or other written notice given to an
employee state that a positive alcohol and controlled substance
test is deemed to be misconduct and may result in the suspension
or termination of employment;

(6)  Requires that alcohol and controlled substance test results
be admissible if the employer's policy states that an employee
may be subject to random testing;

(7)  Authorizes an employer to require a pre-employment test for
the presence of alcohol or controlled substances as a condition
of employment;

(8)  Specifies that an employee's attempt to adulterate or
refusal to take a test for the presence of alcohol or controlled
substances be considered misconduct and disqualifies the claimant
for the waiting week credit and unemployment benefits;

(9)  Requires that if a claimant is disqualified on a second or
subsequent occasion within the base period, the claimant must
earn wages equal to or in excess of six times the claimant's
weekly benefit amount for each of the occasions;

(10)  Specifies that absenteeism or tardiness constitutes
misconduct;

(11)  Eliminates the temporary debt indebtedness assessment which
was to be added to the employer's contribution rate for calender
years 2005, 2006, and 2007 and replaces it with the credit
instrument and financing agreement emergency replacement fee
which will expire in calendar year 2020 or whenever the net trust
fund balance is zero or greater;

(12)  Assesses a credit instrument and financing agreement
emergency repayment fee on employers in any year in which the
January 1 fund balance is not sufficient to meet the minimum
level of debt service required for the following 12 months and is
necessary to prevent the default on outstanding debt obligations.
The fee will be calculated as a percentage of the unemployment
tax rate and will not exceed an additional 10% of the employer's
tax rate;

(13)  Allows the Board of Unemployment Fund Financing to use
credit instruments which mature no later than 15 years after
issuance;

(14)  Requires that owners and operators who lease motor vehicles
with drivers to a for-hire motor carrier will not be deemed
employed for the purposes of the unemployment security laws; and

(15)  Removes the .25% surcharge added to the contribution rate
of an employer with a maximum experience rating for two
consecutive years if the trust fund balance is at least $450
million.  In no case will an employers' cumulative surcharge rate
exceed .50%.

Effective January 1, 2006, the unemployment experience rate must
transfer with a business if both employers involved in the
transfer have substantially common ownership, management, or
control of the business and the transfer was made to lower the
rating.  The rate and liabilities of both employers will be
recalculated.  The rate does not transfer with the business if
the employer acquiring the business is not an employer in the
state at the time of the acquisition.

If an employer knowingly violates, attempts to violate, or
knowingly advises another in a manner that results in a violation
of the provisions relating to the determination of an
unemployment experience rate, the employer's rate will be the
greater of the maximum rate or the employer's rate plus 2% for
the current year and the following three rate years.

Out-of-state employers will be subject to a civil penalty of up
to $5,000 that will be deposited into the Special Employment
Security Fund.  A person violating any provision relating to the
unemployment experience rating is guilty of a class A misdemeanor
for the first offense and a class D felony for any subsequent
offense.

FISCAL NOTE:  No impact on General Revenue Fund in FY 2006, FY
2007, and FY 2008.  Estimated Income on Other State Funds of
$43,279,973 in FY 2006, $92,002,537 in FY 2007, and $92,174,677
in FY 2008.

PROPONENTS:  Supporters say that the bill eliminates an employer
loophole which allows them to improve their experience rating by
transferring the ownership of a business.  The bill is federally
mandated, and noncompliance may result in Missouri employers
losing Federal Unemployment Tax Act (FUTA) tax credits.

Testifying for the bill were Senator Koster; Missouri Chamber of
Commerce and Industry; and Associated Industries of Missouri.

OPPONENTS:  There was no opposition voiced to the committee.

Roland Tackett, Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 1st Regular Session
Last Updated August 25, 2005 at 1:21 pm