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Minnesota senators pass unemployment insurance trust fund bill

(The Center Square) – A bill to repay Minnesota’s federal Unemployment Insurance Trust Fund passed the Senate Monday and it will now travel to the House for consideration.

The bill, SF 2677, appropriates $2.3 billion from the state fiscal recovery federal fund and $408.5 million from the fiscal year 2022 general fund to the commissioner of employment and economic development. 

The commissioner would repay the federal government outstanding loans and accrued interest within 10 days of the bill’s enactment. For the 2022 and 2023 calendar years, the base tax rate would be one-tenth of one percent.

Sen. Eric Pratt, R-Prior Lake, Jobs and Economic Growth Finance and Policy Committee Chair, introduced the bill.

“We appreciate the Senate’s quick action to prevent double-digit tax increases on employers,” Minnesota Chamber of Commerce Senior Vice President of Advocacy Laura Bordelon said about SF 2677 in a news release.

“Using existing funds to replenish the Unemployment Insurance Trust Fund to pre-pandemic levels should be an obvious choice, especially at a time of historic and recurring budget surpluses. There is no reason for the House not to move as quickly and prevent these avoidable tax increases.”

Rep. Mohamud Noor, DFL-Minneapolis, has introduced an alternative: HF 1035. That bill appropriates $1.2 billion to settle the debt, makes hourly school workers eligible for unemployment insurance during the summer months, as well as lengthens the appeal period for applicants and employers for unemployment insurance determinations from 20 days to 60 days.

About $1.15 billion of the remaining American Rescue Plan funds, along with general fund money, would fund the bill, a Minnesota House of Representatives news release said Monday.

“Unemployment insurance is a crucial safety net for Minnesota’s workers, and it has been a lifeline for many during the pandemic,” Noor said in the release. “Paying our state’s debt is a duty we must meet, and we can do so in a way that brings Minnesotans who have been left out under the protection of unemployment insurance while also ensuring that businesses are supported. This way we can build a strong and equitable economic recovery that supports families, workers, and businesses.”

The bill was referred Monday to Ways and Means.

“SF 2677 is the only proposal to completely address Minnesota’s current UI Trust Fund circumstances,” United for Jobs’ release said.

United for Jobs represents hundreds of businesses and 90 trade associations and local chambers of commerce. Minnesota continues to incur debt on the federal loan it received to payroll taxes and additional assessments will increase if legislators do not act by March 15.

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