SLS 202ES-96 ORIGINAL
2020 Second Extraordinary Session
SENATE CONCURRENT RESOL UTION NO. 9
BY SENATORS CORTEZ AND REESE
UNEMPLOYMENT COMP. Suspends the provision of law providing for an unemployment
insurance solvency tax. (Item #8 and #30)
1 A CONCURRENT RESOL UTION
2 To suspend until sixty days after final adjournment of the 2021 Regular Session of the
3 Legislature of Louisiana the provisions of R.S. 23:1536(E)(1) relative to the
4 unemployment insurance solvency tax on employers.
5 WHEREAS, Article III, Section 20 of the Constitution of Louisiana empowers the
6 legislature to suspend a law; and
7 WHEREAS, the current public health emergency caused by COVID-19 has required
8 an extended shutdown of many businesses resulting in a dramatic decline in their revenue
9 and the layoff of their employees; and
10 WHEREAS, the widespread layoffs have led to massive unemployment of workers
11 and increased demands for unemployment benefits; and
12 WHEREAS, state unemployment benefits for Louisiana workers are funded by state
13 unemployment taxes paid by employers which are collected by the Louisiana Workforce
14 Commission and submitted to the United States Department of Labor to be pooled into the
15 state's unemployment trust fund account; and
16 WHEREAS, the dramatic increase in the volume of unemployment benefit claims
17 has resulted in a drastic reduction in the balance of the state's unemployment trust fund
18 account; and
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SLS 202ES-96 ORIGINAL
1 WHEREAS, R.S. 23:1536(E)(1) requires the secretary of the Louisiana Workforce
2 Commission to report when the state's projected unemployment trust fund balance for the
3 next four calendar quarters, together with projected state unemployment taxes to be collected
4 less the projected amount of unemployment benefits to be paid during the next four calendar
5 quarters, will result in a trust fund balance of less than one hundred million dollars and
6 provides that a solvency tax shall be added to an employer's state unemployment taxes for
7 the calendar quarter beginning six months after the end of the calendar quarter in which the
8 projection is made; and
9 WHEREAS, the exact amount of the solvency tax is dependent on the amount the
10 trust fund balance is projected to be below one hundred million dollars and the amount of
11 state unemployment taxes projected to be collected from employers; and
12 WHEREAS, it is anticipated that in October of 2020, the secretary of the Louisiana
13 Workforce Commission will be required to report that the projected fund balance for the next
14 four calendar quarters, together with projected state unemployment taxes to be collected less
15 the projected amount of unemployment benefits to be paid from the state's unemployment
16 trust fund during the next four calendar quarters, will result in a fund balance of less than one
17 hundred million dollars, triggering the solvency tax; and
18 WHEREAS, the impact of the imposition of the solvency tax at this time on many
19 employers already suffering from dramatically reduced revenues could negatively affect
20 their ability to hire back or to retain employees and stay in business.
21 THEREFORE, BE IT RESOLVED that the Legislature of Louisiana hereby suspends
22 the provisions of R.S. 23:1536(E)(1) relative to the unemployment insurance solvency tax
23 on employers.
24 BE IT FURTHER RESOLVED that this suspension shall become effective upon
25 adoption of this Resolution and shall extend through the sixtieth day after final adjournment
26 of the 2021 Regular Session of the Legislature of Louisiana.
27 BE IT FURTHER RESOLVED that a copy of this Resolution be transmitted to the
28 secretary of the Louisiana Workforce Commission.
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SLS 202ES-96 ORIGINAL
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Dawn Romero Watson.
DIGEST
SCR 9 Original 2020 Second Extraordinary Session Cortez
Suspends present law that provides that if the secretary of the Louisiana Workforce
Commission reports, in any calendar quarter, that the projected state unemployment trust
fund balance for the next four calendar quarters, (together with projected state
unemployment taxes to be collected plus any other amounts otherwise pledged thereto, less
the amount of projected unemployment benefits to be paid from the fund during the next
four calendar quarters), will result in a fund balance of less than $100,000,000, there shall
be added to the employer taxes a solvency tax for the calendar quarter beginning six months
after the end of the calendar quarter in which the projection was made.
Present law further provides that the solvency tax shall be determined by the secretary of the
Louisiana Workforce Commission and that it shall be a ratio, expressed as a fraction.
Provides that the numerator of the fraction shall be the amount by which the projected
unemployment trust fund balance during the next four calendar quarters is less than
$100,000,000 and the denominator of the fraction shall be the amount of the projected
unemployment taxes to be collected from employers for the calendar quarter beginning six
months after the end of the calendar quarter in which the projection was made. Provides that
the ratio shall be applied as a percentage to each employer's unemployment tax rate for the
calendar quarter beginning six months after the end of the calendar quarter in which the
projection was made, provided that the aggregate of the added solvency tax for any quarter
shall not exceed a total of 30% of the employer's regular unemployment taxes for that
quarter.
Present law also requires that prior to adding the solvency tax to an employer's regular
unemployment taxes, the secretary of the Louisiana Workforce Commission is to notify the
House and Senate committees on Labor and Industrial Relations, the House Committee on
Ways and Means, and the Senate Committee on Revenue and Fiscal Affairs of the status of
the state's unemployment trust fund and of their intention to add the solvency tax. Requires
their report to also contain recommendations of alternative actions which may be taken
either administratively or legislatively to protect the solvency of the fund. Also requires that
prior to adding the solvency tax to an employer's unemployment tax, they shall conduct
within such calendar quarter in which the projection is made a public hearing for
informational purposes only after public notice thereof. The notice of such hearing shall be
published once in the official journal of the state at least 15 days prior to the hearing date.
Proposed Resolution suspends present law and is effective through the sixtieth day following
final adjournment of the 2021 R.S.
(Suspends R.S. 23:1536(E)(1))
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