The folllowing is a legislative update on HB 1450 regarding unemployment insurance:
Bill # and Title: HB 1450 – Unemployment Insurance
Author: Rep. Dan Leonard (R-Huntington)
Summary: Establishes the weekly unemployment benefit amount as 47% of the individual’s prior average weekly wage. This is calculated by dividing an employee’s earnings during a year (regardless of how many weeks the employee has worked) by 52. Establishes the maximum weekly benefit amount at $390 (which is the current maximum). This change will not become effective until July 1, 2012. This means that people currently drawing unemployment benefits will see no change to their benefits. Places all employers into Rate Schedule E (a lower rate) for the years 2011-2020. Establishes a 13% surcharge for employers to pay into the unemployment insurance solvency fund in order to pay interest due on the outstanding balance of federal loans.
Chamber Position: Support
Status: The bill passed out of the House with 61 votes and was sent to the Senate Tax and Fiscal Policy Committee for consideration.
Update/Chamber Action: In addition to working to get the bill passed in the Senate, the Indiana Chamber is also involved in researching the issue of whether bonds could be issued to pay off the loan to the federal government (a little over $2 billion was owed as of late January). Besides the possibility of getting a lower interest rate (currently the federal government is charging around 4% interest on the outstanding loan balance whereas the interest rate might fall to around 2-2.5% under a bond), if the loan was paid off then Indiana employers would not lose their federal credit toward the payment of their federal unemployment taxes. While unemployment insurance taxes will increase next year (and they must to help return the system to solvency), the Chamber-led shift to Schedule E rates will result in $2 billion in savings (over the intended new rates) for Hoosier employers over the next 10 years.