The Chairmen of the Senate Committee on Commerce and Labor and the House Labor and Commerce Committee appointed a joint subcommittee from their committees to examine the funding needs of the Virginia unemployment compensation system. This joint subcommittee continues a tradition of many years standing in which members of these standing committees have met annually to receive a Virginia Employment Commission (VEC) briefing on the unemployment insurance trust fund's current and projected adequacy. This year, the joint subcommittee also reviewed a bill carried over in the House Labor and Commerce Committee, and considered a proposal to waive repayment of benefit overpayments resulting from VEC administrative error.

The following General Assembly members were appointed to the joint subcommittee: Senators Schewel from Lynchburg, Benedetti from Richmond, Chichester from Fredericksburg, R.J. Holland from Windsor, and Reasor from Bluefield, together with Delegates Croshaw from Virginia Beach, D.C. Jones from Richmond, J.C. Jones from Norfolk, Nelms from Suffolk, and Newman from Lynchburg. Senator Schewel served as Chairman.

The joint subcommittee met on October 17, 1994, at the General Assembly Building in Richmond. It received the VEC's trust fund briefing, presented by VEC Commissioner Kenneth A. Bolles. Additionally, the VEC presented its analysis of House Bill 765, a bill carried over from the 1994 General Assembly Session. House Bill 765 proposed to change the employer responsible for paying benefits from the last 30-day employer to the last 60-day employer. The VEC also provided a trust fund impact assessment concerning a proposal to waive repayment of unemployment compensation benefit overpayments resulting from VEC administrative error.

The joint subcommittee was advised that as of June 30, 1994, the unemployment insurance trust fund was at 68 percent of adequacy (in comparison to 64 percent, one year ago), and that the VEC projects this figure will rise to approximately 81 percent by 1997 (assuming no significant changes in tax or benefit levels and a constant statewide unemployment rate of five percent or lower). Commissioner Bolles noted that an adequacy level of 50 percent or more is indicative of a relatively strong trust-fund balance. The subcommittee received no recommendations from the VEC or any members of the labor or business communities for changes in compensation levels or employer tax rates, nor were any suggested by the joint subcommittee.

The joint subcommittee made no recommendations concerning unemployment compensation benefits or taxation levels. It voted to recommend to the House Labor and Commerce Committee that HB 765 be passed by indefinitely. Finally, the joint subcommittee voted to make no recommendation on the overpayment waiver proposal, noting the VEC's assessment that the proposal's adoption would have a negligible impact on the trust fund.

The joint subcommittee concluded its study, directing that a report of its actions be transmitted to the Governor and the 1995 Session of the General Assembly.