HB 2805 — unemployment insurance; benefits; tax base

HB2805 - 551R - S-Appropriations-ProposedH Ver   Fifty-fifth  Legislature                                             AppropriationsHouse FirstEngrossed Regular  Session                                                  unemployment H.B.insurance;

 benefits; PROPOSED SENATE AMENDMENTS TO H.B.

2805tax (Referencebase to        State of Arizona House engrossedof bill)Representatives Fifty-fifth Legislature First Regular Session   Page  5,  afterHOUSE lineBILL 7,2805 insert:      AN ACT   amending sections 23-622 and 23-779, Arizona Revised Statutes;

"Sec. 3.relating to employment security.

Appropriations;    (TEXT OF BILL BEGINS ON NEXT PAGE)   Be it enacted by the Legislature of the State of Arizona:

budgetSection 1. stabilization fund;

transfer;Section 23-622, Arizona Revised Statutes, is amended to read:

exemptionSTART_STATUTE23-622. A.

TheWages sumA. of $100,000,000 is appropriated from the state general fund in fiscal year 2020-2021 to the budget stabilization fund established by section 35-144, Arizona Revised Statutes, for the purposes prescribed in this section.

"Wages" means all remuneration for services from whatever source, including commissions, bonuses and fringe benefits and the cash value of all remuneration in any medium other than cash.

The reasonable cash value of remuneration in any medium other than cash shall be estimated and determined in accordance with rules prescribed by the department.

On "Wages" or before June 5, 2021, the department of economic security shall reportdo tonot theinclude: state treasurer the balance in the unemployment insurance trust fund as of June 1, 2021 and shall indicate the estimated balance that is projected to be needed to cause the average employer tax rate to be below or approximately at 2.00 percent for calendar year 2022.  Based on these two balances, the department shall report a recommended dollar amount to be added to the unemployment insurance trust fund to cause the unemployment insurance trust fund balance to be the lesser of $900,000,000 or the amount to cause the average employer tax rate to be below or approximately at 2.00 percent.

1.

For the purpose of sections 23-604, 23-726,  and 23-728 and 23-730.01, that part of the remuneration,  (other than remuneration referred to in succeeding paragraphs 2 through 15 of this subsection,)  in excess of seven thousand dollars $7,000 paid in 1983 or in a calendar year thereafter to an individual by an employer or his the employer's predecessor with respect to employment during the calendar year, unless that part of the above specified such excess remuneration is subject to a tax, under federal law, against which credit may be taken for contributions required to be paid into a state unemployment fund by employers subject to the federal law.

Beginning January 1, 2022, the taxable wage base prescribed in this paragraph is in excess of $8,000.

For the purposes of this paragraph, the remuneration paid to an individual by an employer with respect to employment in another state or states, upon on which contributions were required of and paid by such employer under an unemployment compensation law of such other state or states, shall be included as part of remuneration equal to the above specified amounts in this paragraph.  2.

The amount of any payment, including monies paid by an employer for insurance or annuities or into a fund to provide payments for insurance or annuities, made to or on behalf of an employee or any of his the employee's dependents under a plan or system established by an employer which that makes provision for his the employer's employees generally, for his the employer's employees generally and their dependents, for a class of his the employer's employees or for a class of his the employer's employees and their dependents, on account of any of the following:

(a) Sickness or accident disability, except that in the case of payments made to an employee or any of his the employee's dependents, this subdivision excludes from wages only payments which that are received under a workers' compensation law.

(b) Medical or hospitalization expenses in connection with sickness or accident disability.

(c) Death.

3.

The payment by an employer, without deduction from the remuneration of the employee, of the tax imposed upon on an employee under section 3101 of the internal revenue code relating to federal insurance contributions with respect to remuneration paid to an employee for domestic service in a private home or for agricultural labor.

4.

Any payment on account of sickness or accident disability, or medical or hospitalization expenses in connection with sickness or accident disability, made by an employing unit to, or on behalf of, an employee after the expiration of six calendar months following the last calendar month in which the employee worked for such employing unit.

5.

Any payment made to, or on behalf of, an employee or his the employee's beneficiary:

(a) From or to a trust described in section 401(a) of the internal revenue code relating to qualified pension, profit sharing and stock bonus plans which is exempt from tax under section 501(a) of the internal revenue code at the time of the payment unless the payment is made to an employee of the trust as remuneration for services rendered as an employee and not as a beneficiary of the trust.

(b) Under or to an annuity plan which that, at the time of such payment, is a plan described in section 403(a) of the internal revenue code relating to taxability of beneficiaries under qualified annuity plans.

(c) Under a simplified employee pension as defined in section 408(k)(1) of the internal revenue code other than contributions described in section 408(k)(6) of the internal revenue code relating to employee salary reduction arrangements.

(d) Under or to an annuity contract described in section 403(b) of the internal revenue code relating to taxation of beneficiaries under annuities purchased by certain tax exempt organizations, other than a payment for the purchase of the contract which that is made by reason of a salary reduction agreement whether evidenced by a written instrument or otherwise.

(e) Under or to an exempt governmental deferred compensation plan as defined in section 3121(v)(3) of the internal revenue code.

(f) To supplement pension benefits under a plan or trust described in this paragraph to take into account some portion or all of the increase in the cost of living since retirement as determined by the United States secretary of labor, but only if the supplemental payments are under a plan which that is treated as a welfare plan under section 3(2)(b)(ii) of the employee retirement income security act of 1974.

(g) Under a cafeteria plan within the meaning of section 125 of the internal revenue code if such payment would not be treated as wages without regard to such plan and it is reasonable to believe that, if section 125 of the internal revenue code applied for purposes of this section, section 125 of the internal revenue code would not treat any wages as constructively received.

6.

Remuneration paid in any medium other than cash to an employee for service not in the course of the employing unit's trade or business.

7.

Remuneration paid for agricultural labor performed in any medium other than cash.

8.

Any tip, gratuity or service charge received by an employee except:

(a) Before January 1, 1986, if either of the following applies: