356#3s (VEC) Fee to Support Administration. SB30 - Committee Approved

State Budget

2024 Session

Budget Amendments - SB30 (Committee Approved)

Bill Order » Item 356 #3s

View Budget Item
View Budget Item amendments

Fee to Support Administration (language only)

Item 356 #3s

Item 356 #3s
Labor
Virginia Employment Commission

Language

Page 412, strike lines 13 through 18, and insert:

"K. Notwithstanding any other provision of law, as of January 1, 2025, tax rates established pursuant to §§ 60.2-531,60.2-515, 60.2-526, 60.2-527, and 60.2-538, are hereby reduced by 0.05 percent. In addition to these rates, a separate administrative fee equal to 0.05 percent of taxable wages shall be assessed and paid quarterly. The administrative fee is necessary for the proper and efficient administration of the Virginia Unemployment Compensation Act, § 60.2. Administrative fees shall: (i) be deposited to the Special Unemployment Compensation Administration Fund pursuant to §60.2-314 and will be used solely by the Commission for critical technology and staffing requirements; (ii) be due and payable to the Commission by each employer in accordance with such regulation as the Commission may prescribe; (iii) be collected through the same means available for collecting taxes, penalties, and interest (interest applicable to unpaid taxes will also apply to the administrative fee); (iv) not be used to calculate the employer's amount of state unemployment taxes paid for Federal Unemployment Tax Act (FUTA) tax liability purposes; and (v) not be deducted, in whole or in part, from employees' wages."

Explanation

(This amendment updates language provided in the introduced budget bill to allow the Commission to collect an administrative fee to support its operations.)

Item 356

Item 356	First Year - FY2025	Second Year - FY2026
Workforce Systems Services (47000)	$586,779,340	$586,779,340
Unemployment Insurance Services (47002)	FY2025 $586,779,340	FY2026 $586,779,340
Fund Sources:
Special	FY2025 $10,500,443	FY2026 $10,500,443
Trust and Agency	FY2025 $576,278,897	FY2026 $576,278,897

Authority: Title 60.2, Chapters 1 through 6, Code of Virginia.

A. Revenues deposited into the Special Unemployment Compensation Administration Fund shall be used for the purposes set out in the following order of priority: 1) to make payment of any interest owed on loans from the U.S. Treasury for payment of unemployment compensation benefits; 2) to support essential services of the Commission, particularly in the event of reductions in federal funding; 3) to finance the cost of capital projects; and 4) to fund the discretionary fund established in § 60.2-315, Code of Virginia. Funding may be transferred from the capital budget to the operating budget consistent with this language.

B.1. Reed Act funds distributed by the Employment Security Financing Act of 1954 with respect to the federal fiscal years 1956, 1957, and 1958 and credited to the agency from the proceeds related to the sale of agency property with federal equity are hereby appropriated (up to $600,000) to maintain service levels in the agency's local offices.

2. Reed Act funds distributed by the Balanced Budget Act of 1997 and credited to the unemployment trust fund with respect to federal fiscal years 2000, 2001, and 2002, under § 1103 of the Social Security Act (42 U.S.C.), as amended, shall be used only for the administration of the unemployment compensation program, under the direction of the Virginia Employment Commission, and shall not be subject to the requirements of § 60.2-305, Code of Virginia. Reed Act funds from the Balanced Budget Act are hereby appropriated (up to $2.2 million, not to exceed the balance of said Reed Act funds) to pay for upgrading the information technology systems at the Virginia Employment Commission.

C. There is hereby appropriated out of the funds made available to this state under § 1103 of the Social Security Act (42 U.S.C.) as amended, the balance of the $51,067,866 of Reed Act funds, if any, provided in Item 120 E. of Chapter 847, 2007 Acts of Assembly, for upgrading obsolete information technology systems, to include staff costs. This appropriation is subject to the provisions of § 60.2-305, Code of Virginia. Savings as a result of the new systems shall be retained by the commission.

D. Notwithstanding any other provision of law, all fees incurred by the Virginia Employment Commission with respect to the collection of debts authorized to be collected under § 2.2-4806 of the Code of Virginia, using the Treasury Offset Program of the United States, shall become part of the debt owed the Commission and may be recovered accordingly.

E. Workforce development programs shall give priority to assisting Medicaid enrollees who are required to participate in the Training, Education, Employment and Opportunity Program to the extent allowed by federal law.

F. The Governor shall have the authority to alter the administration of the provisions of the Virginia Unemployment Compensation Act, Title 60.2 of the Code of Virginia, to meet the exigencies of a health emergency crisis.

G. The Virginia Employment Commission shall establish and maintain one dedicated full-time customer service position responsible for investigating and responding to legislative inquiries.

H. Notwithstanding any other provision of law, the Virginia Employment Commission shall compute tax rates by excluding pandemic related claim activity. For purposes of this calculation, pandemic related claim activity is defined as all regular Unemployment Insurance claims activity from April 1, 2020, through June 30, 2021. The pool charge shall be computed using this same methodology excluding pandemic related clause for unemployment insurance tax rates and ensure the Commonwealth maintains conformity with federal law.

I. The Virginia Employment Commission (VEC) shall maintain, at a minimum, two dedicated full-time employees to serve in the Office of the Unemployment Compensation Ombudsman. The Commission shall submit a status update on the activities of this office to the House Commerce and Energy Committee, the Senate Commerce and Labor Committee, the Commission on Unemployment Compensation, and the Governor quarterly. The VEC shall publish subsequent updates on its website.

J. VEC shall regularly collect feedback on the usability of the new Unemployment Insurance benefits information technology system from claimants and employers and make regular improvements to the system that address such feedback. The VEC shall publish this information and subsequent updates on its website.

K. The Commission shall promulgate emergency regulations to establish and implement an administrative fee for the purpose of supporting critical technology and staffing requirements. The Commission shall reduce existing employer taxes by a corresponding amount to ensure any such administrative fee is revenue neutral. This administrative fee shall not exceed five percent of the total taxes that would otherwise be collected under § 60.2 511-512, Code of Virginia.