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Indicates Matter Stricken
Indicates New Matter
Indicates Matter Stricken
Indicates New Matter
COMMITTEE REPORT
February 16, 2021
S. 421
S. Printed 2/16/21--S. [SEC 2/17/21 10:48 AM]
Read the first time January 12, 2021.
To whom was referred a Bill (S. 421) to amend Section 41-35-320(2) of the 1976 Code, relating to the payment of extended unemployment security benefits when federally funded, to reduce the lookback, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass:
THOMAS C. ALEXANDER for Committee.
Explanation of Fiscal Impact
State Expenditure
This bill establishes an "on" indicator to trigger for an extended unemployment benefit period, pursuant to Article 3 of Chapter 35 or Title 41 in the code, based on whether the rate of total unemployment within the most recent three months exceeds one hundred and ten percent of the average unemployment for the State in one or more of the corresponding three-month periods ending in the two preceding calendar years. Currently the look-back period is three preceding calendar years. This bill shortens the look-back period from three years to two years.
According the Department of Employment and Workforce (DEW), the Federal-State Extended Unemployment Compensation Act of 1970 (the Act) requires states to provide for the payment of extend benefits (EB) under certain circumstances. Under the Act, a state triggers on to EB whenever its rate of insured unemployment, not seasonally adjusted, during the current week and the twelve preceding weeks equals or exceeds six percent. This standard EB trigger is codified in S.C. Code Ann. Section 41-35-330(A), and provides up to ten weeks of EB.
Section 203(f) of the Act allows states the option of utilizing an alternative EB trigger. Under this optional alternative trigger, EB would trigger on whenever the Total Unemployment Rate (TUR) for the most recent three-month period equals or exceeds 6.5 percent and also equals or exceeds 110 percent of the TUR for either or both of the corresponding three-month periods in the two preceding calendar years. When the TUR equals or exceeds 8 percent, a period of high unemployment is triggered, which would allow eligible claimants to receive additional weeks of EB. This alternative trigger, along with the additional weeks of EB during periods of high unemployment, is codified in S.C. Code Ann. Section 41-35-320, and provides an additional six weeks of EB. The South Carolina legislature passed this statute in 2009 with the federally required two-year look back period.
In 2010, Congress passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. This bill allowed states to temporarily amend its alternative EB trigger law to use a three-year look back period. This option was offered explicitly so states could remain triggered on to the higher EB for longer during the Great Recession. This temporary authorization expired on December 31, 2011.
In response, South Carolina amended Section 41-35-320 to utilize the three-year look back period. However, South Carolina did not include a sunset provision and has not subsequently amended this statute to revert to the federally required two-year look back period. This bill would place South Carolina's statute back into conformity with federal law. This bill is not expected to have an expenditure impact.
Frank A. Rainwater, Executive Director
Revenue and Fiscal Affairs Office
TO AMEND SECTION 41-35-320(2) OF THE 1976 CODE, RELATING TO THE PAYMENT OF EXTENDED UNEMPLOYMENT SECURITY BENEFITS WHEN FEDERALLY FUNDED, TO REDUCE THE LOOKBACK PERIOD FROM THREE YEARS TO TWO YEARS FOR DETERMINING WHETHER THERE IS AN "ON" INDICATOR FOR THIS STATE.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 41-35-320(2) of the 1976 Code is amended to read:
"(2) There is a state 'on' indicator for this State for a week in which the United States Secretary of Labor determines that for the period consisting of the most recent three months, the rate of total unemployment, seasonally adjusted, equaled or exceeded six and a half percent, and the average rate of total unemployment for the State, seasonally adjusted, as determined by the United States Secretary of Labor for this period equals or exceeds one hundred ten percent of the average unemployment for the State in one or more of the corresponding three-month periods ending in the three two preceding calendar years."
SECTION 2. This act takes effect upon approval by the Governor.
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