Legislative Update

from Government Relations

November 4, 2008

Unemployment Insurance Agency to Impose Solvency Tax

The Michigan Unemployment Insurance Agency (UIA) will be sending out notices over the next couple weeks to those Michigan employers who have a negative balance in their unemployment reserve account informing them that they will be assessed a Solvency Tax on top of their normal unemployment insurance contribution rate.

This Solvency Tax is triggered through a provision in the Michigan Employment Security Act when Michigan’s loan balance to the federal government is greater than the balance in Michigan’s unemployment trust fund, which is used to pay unemployment benefits.  The tax goes toward paying the interest on the borrowed federal funds.

Only those employers with a negative balance in their reserve account will be subject to the tax, which will be effective January 1, 2009.  The determination date for calculating whether an employer has a negative balance is as of June 30, 2008.

The Solvency Tax carries a maximum tax rate of 0.75% (.0075) on top of the employer’s contribution rate.  An employer can avoid the additional tax by making payment to erase the negative balance.

Employers who are interested in their balance can call the UIA employer customer relations hotline at 1-800-638-3994.  A quick fact sheet can be found on the UIA home page at www.michigan.gov/uia.

Proposed 2009 Alliance Legislative Agenda Available for Comment

The first draft of the 2009 Legislative Agenda is being considered for adoption by each of the partners in the Northwest Michigan Regional Chamber Alliance.  Individual chamber members are able to review and comment on the document as well.

The document will be used as the guiding principles the Alliance will use to support and promote issues in the upcoming 2009 legislative year. 

The Northwest Michigan Regional Chamber Alliance is a partnership of six chambers of commerce across northwest Michigan with the objective of influencing public policy and acting as the voice of business in northwest Michigan to state and federal legislators.

Legislature Returns this Week

The legislature returns from the October election break to continue committee and session work this week.  The Senate resumes on Wednesday, with the House returning on Thursday.   The legislature has an abbreviated session schedule the following week due to Veterans Day holiday before going on break for firearm deer season and Thanksgiving, returning the first week of December.  

Items that are garnering the most attention are the MBT surcharge repeal tied to corrections reform.  A push for transportation funding revisions and the Individual Market Reform legislation are also heating up as well.  Stay tuned for updates from the Government Relations Division.