GENERAL ASSEMBLY OF NORTH CAROLINA
EXTRA SESSION 1991

CHAPTER 6
SENATE BILL 4

AN ACT TO LOWER THE EMPLOYMENT SECURITY COMMISSION RESERVE FUND THRESHOLD, THEREBY ELIMINATING UNNECESSARY ACCUMULATIONS IN THE RESERVE FUND AND PROVIDING RELIEF TO EMPLOYERS.

The General Assembly of North Carolina enacts:

Section 1.  G.S. 96-5(f) reads as rewritten:
"(f)	Employment Security Commission Reserve Fund. – There is created in the State treasury a special trust fund, separate and apart from all other public moneys or funds of this State, to be known as the Employment Security Commission Reserve Fund, hereinafter 'Reserve Fund'.  Part of the proceeds from the tax on contributions imposed in G.S. 96-9(b)(3)j shall be credited to the Reserve Fund, as specified in that statute.  The moneys in the Reserve Fund may be used by the Commission for loans to the Unemployment Insurance Fund, as security for loans from the federal Unemployment Insurance Trust Fund, and to pay any interest required on advances under Title XII of the Social Security Act, and shall be continuously available to the Commission for expenditure in accordance with the provisions of this section.  The State Treasurer shall be ex officio the treasurer and custodian and shall invest said moneys in accordance with existing law as well as rules and regulations promulgated pursuant thereto.  Furthermore, the State Treasurer shall disburse the moneys in accordance with the directions of the Commission and in accordance with such regulations as the Commission may prescribe.
Administrative costs for the collection of the tax and interest payable to the Reserve Fund shall be borne by the Special Employment Security Administration Fund.  
The interest earned from investment of the Reserve Fund moneys shall be deposited in a fund hereby established in the State Treasurer's Office, to be known as the 'Worker Training Trust Fund'.  These moneys shall be used to:
(1)	Fund programs, specifically for the benefit of unemployed workers or workers who have received notice of long-term layoff or permanent unemployment, which will enhance the employability of workers, including, but not limited to, adult basic education, adult high school or equivalency programs, occupational skills training programs, assessment, job counseling and placement programs;
(2)	Continue operation of local Employment Security Commission offices throughout the State; or
(3)	Provide refunds to employers.
The use of funds from the Worker Training Trust Fund, for the purposes set out in the above paragraph, shall be pursuant to appropriations in the Current Operations Appropriations Act.  Funds appropriated from the Worker Training Trust Fund that are unexpended and unencumbered at the end of the fiscal year for which they are appropriated shall revert to the State treasury to the credit of the Worker Training Trust Fund in accordance with G.S. 143-18."
Sec. 2.  G.S. 96-9(b)(3)j. reads as rewritten:
"j.	A tax is imposed upon contributions at the rate of twenty percent (20%) of the amount of contributions due.  The tax is due and payable at the time and in the same manner as the contributions.  The tax does not apply in a calendar year if, as of August 1 of the preceding year, the amount in the Reserve Fund equals or exceeds one hundred sixty-three million three hundred forty-nine thousand dollars ($163,349,000), which is one percent (1%) of taxable wages for calendar year 1984.  The collection of this tax, the assessment of interest and penalties on unpaid taxes, the filing of judgment liens, and the enforcement of the liens for unpaid taxes is governed by the provisions of G.S. 96-10 where applicable.  Taxes collected under this subpart shall be credited to the Employment Security Commission Reserve Fund, and refunds of the taxes shall be paid from the same Fund.  Any interest or penalties collected on unpaid taxes shall be credited to the Special Employment Security Administration Fund, and any interest or penalties refunded on taxes imposed by this subpart shall be paid from the same Fund.  "
Sec. 3.  This act is effective for taxes imposed for calendar years beginning on or after January 1, 1992.  This act does not affect the date set in G.S. 96-9(c)(3) by which an employer must file an application for review or redetermination of the employer's rate of contributions for the 1992 calendar year.
In the General Assembly read three times and ratified this the 24th day of January, 1992.

James C. Gardner
President of the Senate

Daniel Blue, Jr.
Speaker of the House of Representatives