STATE OF OKLAHOMA

1st Session of the 52nd Legislature (2009)

SENATE BILL 1176	By:	Corn

AS INTRODUCED

An Act relating to labor; creating the Oklahoma Unemployment Insurance Trust Fund Security Act of 2009; stating certain findings and intentions; providing for certain administrative fund assessment rate reductions for certain types of employers; providing for limit to certain reduction; providing certain employers shall not be eligible for certain rate reduction; creating the OESC Administrative Fund; making fund separate and distinct from certain other funds; stating what the fund shall consist of; making fund a continuing fund; appropriating funds to be budgeted and expended for certain purposes; providing for expenditures from fund; restricting use of certain monies in fund; setting maximum withdrawal per calendar year from fund; providing for certain funds remaining in the fund after maximum withdrawal; making State Treasurer custodian and treasurer of fund; requiring certain deposit of monies to fund; authorizing custodian to hold, invest, transfer, sell, deposit and release certain monies, properties or securities in a manner approved by the Oklahoma Employment Security Commission; providing for investment of monies; restricting investment for certain purpose; providing for certain assessments to the OESC Administrative Fund for certain employers; making assessment in addition to certain required contribution; providing certain assessment to not be part of any contribution required of an individual under certain circumstances; providing assessment shall not be used for determining certain employers contribution rate; providing for certain assessments to the OESC Administrative Fund for certain employers assigned a certain tax rate; exempting certain employers; requiring assessment to be made on a quarterly basis; providing for deposit of certain monies; providing for certification of certain balance; making monies over certain balance excess funds; providing for transfer of excess funds to the Unemployment Trust Fund; authorizing the Oklahoma Employment Security Commission to promulgate certain rules; directing the adoption of an agency-wide performance improvement program; providing for a certain reduction in withdrawals from the OESC Administrative Fund under certain circumstances; providing for codification; providing for noncodification; and providing an effective date

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     NEW LAW     A new section of law not to be codified in the Oklahoma Statutes reads as follows:
This act shall be known and may be cited as the "Oklahoma Unemployment Insurance Trust Fund Security Act of 2009".
SECTION 2.     NEW LAW     A new section of law not to be codified in the Oklahoma Statutes reads as follows:
The State of Oklahoma finds that the programs administered by the Oklahoma Employment Security Commission are necessary for the economic well-being of workers and employers in Oklahoma.  Due to recent funding shortfalls by the federal government, the effectiveness and integrity of the Oklahoma Employment Security Commission programs are being compromised, and this will in turn have a negative impact on Oklahoma's Unemployment Trust Fund.  If the balance of the Unemployment Trust Fund is reduced by large layoffs, fraud and abuse or a failure to reemploy laid-off workers as quickly as possible, all Oklahoma workers and employers will be financially impacted.  If the balance of the Unemployment Trust Fund falls, benefits to laid-off workers will be reduced and taxes to employers will be increased.
In order to avoid these adverse consequences, it is the intention of the State of Oklahoma that programs should be put in place and maintained that will use reemployment services to reduce the duration of unemployment claims when they occur, and combat fraud and abuse of the system.  This will have the effect of increasing Oklahoma's economic competitiveness with other states and modernize the unemployment insurance system.
SECTION 3.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 3-109.3 of Title 40, unless there is created a duplication in numbering, reads as follows:
Notwithstanding the provisions of Sections 3-103, 3-109, 3-110, and 3-113 of Title 40 of the Oklahoma Statutes, for any tax year beginning after December 31, 2010, the contribution rate assigned to an employer shall be reduced by six percent (6%).  Provided, the tax rate of employers assigned a tax rate pursuant to Sections 3-103 and 3-110 of Title 40 of the Oklahoma Statutes shall not be reduced to less than one percent (1%).  Provided further, employers who qualify for an earned rate calculated pursuant to Section 3-109 of Title 40 of the Oklahoma Statutes, and are given the highest rate in the rate scale, shall not be eligible for the rate reduction provided for in this section.
SECTION 4.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 6-201 of Title 40, unless there is created a duplication in numbering, reads as follows:
A.  There is hereby created in the State Treasury a revolving fund for the Oklahoma Employment Security Commission to be designated the "OESC Administrative Fund".  The OESC Administrative Fund shall be separate and distinct from the Unemployment Compensation Fund, and all other special funds, and shall consist of:
1.  All monies received from employers and paid pursuant to Section 7 of this act;
2.  All other sums, from whatever source, received by the Commission and paid into the OESC Administrative Fund; and
3.  Property and securities acquired by and through the use of monies in the OESC Administrative Fund.
B.  The OESC Administrative Fund shall be a continuing fund, not subject to fiscal year limitations.  All monies accruing to the credit of the OESC Administrative Fund are hereby appropriated and shall be budgeted and expended for the purposes set forth in Section 5 of this act.  Expenditures from the OESC Administrative Fund shall be made upon warrants issued by the State Treasurer against claims filed, as prescribed by law, with the Director of State Finance for approval and payment.
SECTION 5.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 6-202 of Title 40, unless there is created a duplication in numbering, reads as follows:
A.  Subject to the limitations set out in subsection B of this section, the monies in the OESC Administrative Fund shall only be used to pay expenses incurred by the Oklahoma Employment Security Commission in the administration of any program or service under the control of the Oklahoma Employment Security Commission.
B.  1.  The Oklahoma Employment Security Commission may withdraw a maximum of Twelve Million Dollars ($12,000,000.00) per calendar year from the OESC Administrative Fund for administrative expenses described in subsection A of this section.
2.  Any money remaining in the fund, after the maximum amount has been withdrawn or transferred under paragraph 1 of this subsection, shall be held in the fund for use in a future year or deposited in the Unemployment Trust Fund pursuant to the provisions of Section 7 of this act.
SECTION 6.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 6-203 of Title 40, unless there is created a duplication in numbering, reads as follows:
A.  The State Treasurer shall be the custodian and treasurer of the OESC Administrative Fund.
B.  The State Treasurer shall deposit the monies belonging to the OESC Administrative Fund that are in his or her custody, subject to the provisions of Sections 5 and 7 of this act.
C.  The State Treasurer, as custodian of the OESC Administrative Fund, shall hold, invest, transfer, sell, deposit and release those monies, properties or securities in a manner approved by the Oklahoma Employment Security Commission.  Provided, however, that those monies shall be invested in the classes of securities legal for investment of public monies of this state.  Provided further, the investment shall at all times be so made that all assets of the OESC Administrative Fund shall always be readily convertible into cash when needed for any expenditure authorized in Section 5 of this act.
SECTION 7.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 6-204 of Title 40, unless there is created a duplication in numbering, reads as follows:
A.  1.  For any tax year beginning after December 31, 2010, each employer subject to the provisions of Sections 3-103, 3-109 and 3-110 of Title 40 of the Oklahoma Statutes shall be required to pay an OESC Administrative Fund assessment equal to six percent (6%) of the unemployment contributions that would be owed to the Oklahoma Employment Security Commission before any rate reduction is made pursuant to Section 3 of this act.  This assessment shall be in addition to any contribution which that employer is required to make pursuant to the provisions of the Employment Security Act of 1980.
2.  The assessment provided for in this section shall not be considered part of any contribution required of an individual employer pursuant to the Employment Security Act of 1980, nor shall it be considered for purposes of determining the individual employer’s contribution rate.
B.  Employers assigned a tax rate pursuant to Sections 3-103 and 3-110 of Title 40 of the Oklahoma Statutes shall pay an OESC Administrative Fund assessment equal to the rate reduction granted them pursuant to Section 3 of this act.
C.  Employers who qualify for an earned rate calculated pursuant to Section 3-109 of Title 40 of the Oklahoma Statutes, and are given the highest rate in the rate scale, shall be exempt from the provisions of this section.
D.  Employers making payments in lieu of contributions pursuant to Sections 3-702, 3-705 and 3-806 of Title 40 of the Oklahoma Statutes shall be exempt from the provisions of this section.
E.  The assessment shall be made and collected by the Oklahoma Employment Security Commission for deposit, on a quarterly basis, to the credit of the OESC Administrative Fund.  Provided, all monies received by the Oklahoma Employment Security Commission for the account of the OESC Administrative Fund, upon receipt, shall be deposited in a clearance account in a financial institution located in this state.
F.  On December 31 of each year, the Chief Financial Officer of the Oklahoma Employment Security Commission will certify the balance in the OESC Administrative Fund.  If the balance of the fund is more than Eighteen Million Dollars ($18,000,000.00), the Chief Financial Officer shall further certify the amount over that sum as excess funds.  The Chief Financial Officer will transfer the certified amount of excess funds to the Unemployment Trust Fund for the State of Oklahoma.  The transfer will occur in one payment on or before January 15, following a certification that excess funds as defined in this subsection exist.
G.  The Oklahoma Employment Security Commission shall promulgate such rules as may be necessary to implement the provisions of this act.
SECTION 8.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 6-205 of Title 40, unless there is created a duplication in numbering, reads as follows:
The Oklahoma Employment Security Commission shall adopt and implement an agency-wide performance improvement program.  The performance improvement program will ensure that all agency operations are utilizing technological and personnel resources in the most effective and efficient manner and that the needs of Oklahoma employers and persons using the Unemployment Benefit Program and the Employment Service are being met.  The Oklahoma Employment Security Commission will develop an implementation plan that will identify performance improvement program methodologies and action steps for the program.  The implementation plan will be in writing and submitted for a one-time approval to the Commissioners of the Oklahoma Employment Security Commission.  The Oklahoma Employment Security Commission shall submit semiannual reports of measurable goals and action plan progress, including verifiable program improvement, to the Commissioners of the Oklahoma Employment Security Commission and the Secretary of Commerce and Tourism.  
SECTION 9.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 6-206 of Title 40, unless there is created a duplication in numbering, reads as follows:
If the Oklahoma Legislature makes an appropriation of money from a Reed Act distribution received pursuant to 42 U.S.C. Section 1103, then the amount allowed to be withdrawn from the OESC Administrative Fund pursuant to subsection B of Section 5 of this act in a given calendar year, shall be reduced by the amount of funds drawn down from the Reed Act appropriation by the Oklahoma Employment Security Commission for the payment of administrative expenses in that same calendar year.
SECTION 10.  This act shall become effective November 1, 2009.

52-1-867	LKS	1/15/2009 8:08:49 PM