GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

S	1 

SENATE BILL 1466

Short Title:  Refunds From ESC Reserve.	(Public)

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Sponsors: Senators McDaniel; Page, Ballantine, Carrington, Cochrane, Forrester, Blust, Hartsell, Carpenter, Horton, Smith, Ledbetter, Clark, Shaw, Foxx, Kincaid, Simpson, Blackmon, Webster, Little, Davis, East, and Allran.

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Referred to:  Finance.

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June 3, 1996

A BILL TO BE ENTITLED
AN ACT TO DIRECT THE EMPLOYMENT SECURITY COMMISSION TO REFUND TO EMPLOYERS MONEYS IN THE EMPLOYMENT SECURITY COMMISSION RESERVE FUND, TO REPEAL THE TAX ON EMPLOYER CONTRIBUTIONS, AND TO REPEAL THE EMPLOYMENT SECURITY COMMISSION RESERVE FUND AND THE WORKER TRAINING TRUST FUND.
The General Assembly of North Carolina enacts:
Section 1.  Effective July 1, 1996, G.S. 96-9(b)(3)j. is repealed.
Sec. 2.  Effective June 30, 1997, G.S. 96-5(f) is repealed.
Sec. 3.  Effective July 1, 1996, G.S. 96-5(f) reads as rewritten:
"(f)	Employment Security Commission Reserve Fund. – There is created in the State treasury a special trust fund, separate and apart from all other public moneys or funds of this State, to be known as the Employment Security Commission Reserve Fund, hereinafter 'Reserve Fund'. Moneys collected as repayments of loans made from the Reserve Fund prior to July 1, 1996, shall be credited to the Reserve Fund through June 30, 1997.  Loan repayments collected after June 30, 1997, shall be deposited to the General Fund.  The State Treasurer shall be ex officio the treasurer and custodian of moneys in the Reserve Fund and shall disburse the moneys in accordance with the directions of the Commission as authorized by law.
Administrative costs for the collection of interest payable to the Reserve Fund shall be borne by the Special Employment Security Administration Fund.
The interest earned from investment of the Reserve Fund moneys shall be deposited to the General Fund. Funds in the Worker Training Trust Fund on and after July 1, 1996, shall be used to:
(1)	Fund programs, specifically for the benefit of unemployed workers or workers who have received notice of long-term layoff or permanent unemployment, which will enhance the employability of workers, including, but not limited to, adult basic education, adult high school or equivalency programs, occupational skills training programs, assessment, job counseling and placement programs;
(2)	Continue operation of local Employment Security Commission offices throughout the State; or
(3)	Provide refunds to employers.
The use of funds from the Worker Training Trust Fund, for the purposes set out in the above paragraph, shall be pursuant to appropriations in the Current Operations Appropriations Act.  Funds appropriated from the Worker Training Trust Fund that are unexpended and unencumbered at the end of the fiscal year for which they are appropriated shall revert to the State treasury to the credit of the General Fund."
Sec. 4.  (a)	Refund.  The Employment Security Commission, hereafter "Commission", shall use all funds in the Employment Security Reserve Fund unencumbered as of July 1, 1996, to:
(1)	First, refund to each employer in this State the amount of tax paid by the employer on the employer's contributions under G.S. 96-9(b)(3)j. through July 1, 1996;
(2)	Then, pay the costs of administering this act; and
(3)	If there are funds remaining after complying with subdivisions (1) and (2) of this subsection, then distribute excess funds in accordance with subsection (c) of this section.
The Commission shall draw the refunds paid under this section from the Employment Security Commission Reserve Fund, hereafter "Reserve Fund", established pursuant to G.S. 96-5(f).  The Commission shall make refunds in accordance with the procedure established in subsection (b) of this section.
(b)	Refund Procedure.  The Commission shall, to the maximum extent possible, identify every employer who paid tax under G.S. 96-9(b)(3)j. through July 1, 1996, including the amount paid by each employer and the time period in which the tax was paid.  The Commission shall send a notice to each employer identified indicating the amount of the refund to be paid and how the refund amount was calculated.  Each employer shall be given a reasonable opportunity after receipt of notice to show proof that the amount of the tax paid by the employer, not including assessments of interest and penalties on unpaid taxes, was greater than the amount determined by the Commission.  If the Commission deems the proof provided by the employer to be satisfactory, then the Commission shall adjust the amount to be refunded accordingly.
(c)	Funds remaining in the Reserve Fund after refunds and administrative expenses authorized under this section have been paid or accounted for shall be distributed by the Commission to current employers in an amount proportional to the credit balance in each employer's account.
(d)	The Commission may establish and implement additional procedures not inconsistent with this act to identify employers and to secure from employers the documentation necessary to carry out the purposes of this act.
Sec. 5.  The Commission shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on or before December 1, 1996, on the implementation of this act.
Sec. 6.  This act is effective upon ratification.