Relates to moneys to be credited to the general account of the unemployment insurance fund

◆ The sponsor's argument

Why Jessica Ramos says this is needed

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.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.