ARIZONA STATE SENATE
Phoenix, Arizona
unemployment insurance;
Indian tribes; training
An emergency measure that allows Indian tribes the option of payments or contributions to the state unemployment insurance trust fund.
Background
Indian tribes as employers are required to pay state and federal employee insurance benefits to the unemployment trust fund. On December 21, 2000 the Consolidated Appropriations Act (CAA) was passed by the U.S. Congress, which reduced Indian tribes’ obligation to pay employee benefits to state governments and eliminated their obligations to pay the federal government.
The CAA allows nonprofit organizations, like Indian tribes, the option of selecting payments instead of contributions to the unemployment trust fund when their respective states adopt conforming language that outlines exemptions for employers fulfilling other criteria.
Payments are unlike contributions, because payments are made as reimbursements to the government after an employee collects unemployment. The amount of the reimbursement is equal to the amount of money drawn by the individual collecting unemployment. Contributions are based upon a set dollar amount per year per employee. Currently, employers pay $56 for each employee per year according to the Department of Economic Security (DES). The payment option exempts employers from paying job training tax, because the employer is only held liable for any unemployment funds that are drawn by an employee.
There is no fiscal impact of S.B. 1156 according to DES.
Provisions
1. Allows Indian tribes to pay state unemployment insurance benefits through either payments or contributions.
2. Adopts conforming language to the CAA that allows the exemption of nonprofit employers from the job training employer tax when payments in lieu of contributions are chosen.
3. Contains an emergency clause.
Prepared by Senate Staff
January 23, 2001