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Thursday, February 18, 2010
Unemployment tax relief passes House
By News Release @ 8:20 PM :: 7057 Views :: Energy, Environment

NEWS RELEASE from House Democratic Caucus Feb 18:

HONOLULU, HAWAII - The state House of Representatives today passed on third reading a bill that would set new employer contribution rates for unemployment insurance. Unless legislation is passed, the rates will soar in the coming year due to the poor economy and high unemployment negatively impacting Hawaii’s businesses.

“Because of the recession, unemployment insurance rates will rise precipitously if no legislative action is taken,” said Rep. Karl Rhoads, Chair of the House Committee on Labor & Public Employment. “HB 2169 will provide significant tax relief for businesses during this tough economic time while maintaining unemployment benefits for those who have been laid off through no fault of their own. Unemployment benefits provide working families with the financial resources to keep food on the table and pay the mortgage or rent.”

HB2169, HD2 proposes the following:

· Sets, for calendar years 2010 and 2011, the wage base at 90% of the average annual wage.

· Sets, for calendar year 2010, the employer contribution rate at schedule D and for calendar year 2011, the employer contribution rate at schedule F.

· Retains the maximum weekly benefit rate at 75% of the average weekly wage until December 31, 2011.

· Returns the maximum weekly benefit rate to 70% of the average weekly wage on January 1, 2012.

· Authorizes special assessments upon employers to pay the principal and interest costs on loans received from the U.S. Secretary of Labor provided that the director of Labor and Industrial Relations develops a fair and equitable manner in which these payments are made.

· Establishes for recalculation of the adequate reserve fund beginning in 2011.

The House and Senate agreed earlier this session to fast-track unemployment insurance legislation with the goal of passing a new employer contribution rate structure to help small businesses as soon as possible. Read the bill online at: http://www.capitol.hawaii.gov/session2010/bills/HB2169_HD2_.htm

HB2169, HD2 now crosses over to the state Senate for consideration. If the Senate makes amendments to the bill, the House and Senate will conference to work out differences in the two versions.

Thelma Mary Dreyer is a spokesperson for the House Democratic Caucus.

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Hawaii Chamber of Commerce NEWS RELEASE Feb 17

Unemployment Insurance Tax Relief Bill Passes House Finance Committee with Chamber's Amendments

By: Bryna Stankiewicz

More than 90 members from the business community statewide submitted testimony on HB 2169 HD1, a bill that would mitigate the huge unemployment insurance tax increase set to take place in April if no law is passed. The measure was heard in the House Finance Committee, chaired by Marcus Oshiro, on February 5.  

The Chamber testified in support of HB 2169 HD1 with amendments to conform with the Chamber's version, HB 2201 (Chamber Testimony). After substantive deliberation and discussion, the chair, on February 9, amended the bill by incorporating most of the Chamber's proposal. 

To recap, the Finance Committee made the following amendments:

  • Changed the adequate reserve multiplier from 1.25 to 1.0. This allows funds to stay in the economy rather than sit in the fund. 12 months of benefits for the worse year in the past ten years is more than adequate reserves according to most experts.
  • Changed the 2011 Schedule to F compared to G at 90% of the taxable wage base. Although the Chamber advocated to permanently keep the base at 90%, we believe 90% at two years will still provide ongoing relief to those hardest hit by the recession. The change in in schedule saves an employer on average $320 per employee.
  • Changed the permanent increase of the maximum weekly benefit rate at 75% of the average weekly wage to temporary (until 2012).
  • Emphasized equitable and fair distribution of interest payments on amount borrowed and principle of amount borrowed.

Much mahalo to all of you for your efforts and support in submitting testimony. We are one step closer, however, the campaign is far from over. More than likely the bill will pass the House and cross over to the Senate some time next week. We will need to “kick it up a notch” and encourage the Senate, especially the Senate Labor and Ways and Means Committees to accept HB 2169 HD2 as it stands.

Your voice is critical to the process. If you have not responded to any of the Action Alerts, you will have only a few more opportunities to do so. You cannot afford not to take action. We must continue to stay vocal and persistent to achieve a more gradual UI tax increase.

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