HCS HB 519 -- UNEMPLOYMENT INSURANCE

SPONSOR:  Hunter (Roark)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Workforce
Development and Workplace Safety by a vote of 7 to 5.

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 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)  Extends the temporary debt indebtedness assessment which
was to be added to the employer's contribution rate for calender
years 2005, 2006, and 2007 to 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)  Requires that any party subject to a decision of an appeals
tribunal may designate a representative who may be a certified
public accountant;

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

(15)  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.

The substitute also requires that the unemployment experience
rate 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.  Additionally, 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:  Estimated Income on General Revenue Fund of Unknown
in FY 2006, FY 2007, and FY 2008.  Expected to exceed $100,000.
Estimated Income on Other State Funds of $42,750,794 to Unknown
in FY 2006, $91,002,537 to Unknown in FY 2007, and $91,950,345 to
Unknown.

PROPONENTS:  Supporters say that the federal debt retirement
provisions of last year's unemployment insurance bill failed to
restore Missouri employers' Federal Unemployment Tax Act tax
credits and lower the interest rate on the outstanding
Unemployment Compensation Trust Fund deficit.  The provisions
relating to the transfer accounts are federally mandated and must
be codified this legislative session.

Testifying for the bill were Representative Roark; Associated
Industries of Missouri; Missouri Grocers Association; Missouri
Restaurant Association; Independent Electrical Contractors
Association; National Federation of Independent Business;
Missouri Retailers Association; and Missouri Motor Carriers
Association.

OPPONENTS:  Those who oppose the bill say that last year's bill
has not been given a chance to work.

Testifying against the bill were Missouri AFL-CIO; Carpenters'
District Council of Kansas City; Carpenters' District Council of
Greater St. Louis; and United Steelworkers of America, District
11.

Roland Tackett, Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 1st Regular Session
Last Updated August 25, 2005 at 1:19 pm