SD27 - Interim Report of the Joint Subcommittee Studying the Funding Requirements of the Virginia Unemployment Compensation Act

Executive Summary:

Originally established by SJR 133 in 1977, the Joint Subcommittee Studying the Funding Requirements of the Virginia Unemployment Compensation Act ("the Act") was continued for another two years in 1996 by SJR 29 (Appendix A). As an ongoing function, the subcommittee hears the Virginia Employment Commission's (VEC) annual briefing on the Unemployment Trust Fund's current and projected adequacy. In addition, the subcommittee reviews and recommends major revisions to the Act, as proposed from time to time by the VEC, business and organized labor representatives.

The following General Assembly members were appointed to the joint subcommittee: Senators Reasor from Blue field, Benedetti from Richmond, Chichester from Fredericksburg, R.J. Holland from Windsor, and Y.B. Miller from Norfolk, together with Delegates Croshaw from Virginia Beach, Hull from Falls Church, D. C. Jones from Richmond, J.C. Jones from Norfolk, and Nelms from Suffolk. Senator Reasor and Delegate Croshaw served as chairman and vice chairman, respectively.

The joint subcommittee met in Richmond on October 8, 1996, to receive the VEC's trust fund briefing, presented by VEC Commissioner Dr. Thomas J. Towberman. The subcommittee also considered and recommended a proposal to extend the new-employer tax rate scheme currently in effect that was subsequently approved by the 1997 General Assembly (SB 960).

Additionally, the joint subcommittee met during the 1997 Session of the General Assembly to make recommendations on introduced bills whose passage could impact the unemployment trust fund's balance. The joint subcommittee heard testimony concerning bills designed to (i) reduce unemployment insurance taxes for employers by altering the trust fund balance factor, (ii) increase the maximum payments to unemployed persons, and (iii) increase the number of claimants eligible to receive benefits by reducing the highest two quarters earnings requirements. These measures were incorporated in two identical bills that were approved by the General Assembly (SB 1089 and HB 2559).