SB 1053: Authorizing Unemployment Automation and Administration Fund to modernize and enhance WorkForce West Virginia - West Virginia

sb1053 hfin am adopted.htm → sb1053 hfin amt adopted.htm · 4 edits

MODERATE

The bill was amended to change its title and scope, explicitly adding a new section for an Unemployment Automation and Administration Fund. This fund allows for a temporary 7% reduction in employer unemployment taxes starting July 1, 2026, in exchange for a mandatory 7% annual fee paid by employers to fund system modernization and workforce development. The amendment clarifies that these tax reductions and fees will automatically end once the fund reaches $60 million or by July 1, 2031, whichever comes first.

Scope change

The bill's scope expanded from modifying existing contribution rates to establishing a new special trust fund with specific rules for funding, disbursement, and termination of the temporary tax relief.

FISCAL

Created a new Unemployment Automation and Administration Fund to collect a 7% annual fee from employers.

TIMELINE

Established a temporary tax reduction of 7% effective July 1, 2026, with a sunset date of July 1, 2031, or when the fund reaches $60 million.

REQUIREMENT

Mandated that employers pay an annual automation fee to support system upgrades, job search improvements, and workforce development initiatives.

SCOPE

Updated the bill title to reflect the new fund, the temporary tax reduction, and the specific purposes for which the collected money can be used.

Committee Substitute for the Committee Substitute → sb1053 hfin am adopted.htm · 4 edits

MODERATE

The bill was amended to replace a flat 7% contribution rate with a new 7% fee based on total taxable wages, capped at $18 million annually. The amendment also added a sunset clause to stop collections once the fund reaches $60 million or by 2031, and introduced a federal compliance clause to ensure tax rates do not drop below legal minimums.

Scope change

The bill's scope shifted from a percentage of wages to a percentage of total taxable wages, and applicability was restricted to employers with non-zero contribution rates.

FISCAL

Changed the funding mechanism from a fixed 7% of contribution rates to a 7% fee based on total taxable wages, capped at $18 million per year.

TIMELINE

Added a sunset provision that halts fee collections when the fund reaches $60 million or by July 1, 2031, whichever comes first.

REQUIREMENT

Added a federal compliance clause preventing the tax rate from falling below federally required levels.

ELIGIBILITY

Limited the new fee requirement to employers who currently have a contribution rate greater than zero.

Committee Substitute → Committee Substitute for the Committee Substitute · 5 edits

MODERATE

The bill was advanced from a single sponsor to co-sponsorship by Senators Helton and Roberts, with the reporting committee changed from the Committee on the Workforce to the Committee on Finance. The effective date was updated to July 1, 2026, and the bill title was adjusted to reflect its status as a Committee Substitute for the Committee Substitute.

Scope change

The bill's scope remains focused on creating the Unemployment Automation and Administration Fund, but the legislative process has advanced it closer to final passage with a change in committee oversight and sponsorship.

TIMELINE

The effective date of the new fund and automation initiatives was updated to July 1, 2026.

REQUIREMENT

The bill's sponsor was changed from Senator Helton alone to include Senator Roberts as a co-sponsor.

The committee responsible for reporting the bill was changed from the Committee on the Workforce to the Committee on Finance.

TECHNICAL

The bill title was updated to indicate it is a 'Committee Substitute for the Committee Substitute' rather than just a 'Committee Substitute'.

Minor formatting adjustments were made to section headers, such as changing 'Definitions' to 'Definitions.' and 'Creation of Fund' to 'Creation of fund.'

Enrolled Version → Committee Substitute · 7 edits

MODERATE

The bill was revised to remove the temporary 7% reduction in employer unemployment contributions, instead directing that 7% of existing contributions be automatically deposited into a new Unemployment Automation and Administration Fund. The new version also replaces a specific fee collection mechanism with a direct allocation of employer contributions and updates the fund's termination threshold from $60 million to $18 million per fiscal year. These changes shift the funding model from a separate fee to a portion of regular contributions and significantly lower the cap on annual funding before the automatic reduction triggers.

Scope change

The bill's scope shifted from a temporary tax reduction and separate fee system to a permanent allocation of a portion of existing employer contributions into a new special trust fund.

REQUIREMENT

Removed the provision that temporarily reduced the standard unemployment contribution rate by 7% starting July 1, 2026.

FISCAL

Added a requirement that 7% of every employer's contribution to the Unemployment Compensation Fund be automatically deposited into the new Unemployment Automation and Administration Fund.

Changed the annual funding cap for the new fund from a total of $60 million in collected fees to a limit of $18 million in contributions per fiscal year.

Replaced the specific fee calculation based on taxable wages with a direct percentage allocation of the existing employer contribution.

TIMELINE

Removed the specific date for reimposing full contribution rates upon reaching the fund cap, replacing it with a general limitation on contributions when the cap is reached.

DEFINITION

Added numbered definitions for key terms including 'Employer contribution', 'Fiscal year', and 'Unemployment Compensation Fund'.

TECHNICAL

Added a note explaining the bill's purpose and standard legislative formatting instructions regarding strikethroughs and underscoring.

Introduced Version → Enrolled Version · 5 edits · Apr 1, 2026

MODERATE

The bill was finalized as the Enrolled Version, adding a new co-sponsor and changing the effective date to July 1, 2026. The core policy shift involves replacing a direct reduction in the employer unemployment tax rate with a new annual fee based on total taxable wages, while retaining the same $18 million annual cap and $300 million trust fund safety net.

Scope change

The bill's scope expanded to include a new co-sponsor and added explicit language requiring compliance with federal law to prevent the fee from violating federal tax minimums.

FISCAL

The mechanism for funding automation changed from a 7% reduction in the employer's unemployment tax rate to a separate 7% annual fee calculated on total taxable wages.

REQUIREMENT

New language was added to ensure the fee reduction does not violate federal minimum tax requirements.

TIMELINE

The effective date was updated to July 1, 2026, and the bill now includes a termination clause for fee collections if the fund reaches $60 million or by July 1, 2031.

DEFINITION

The definition of the fund was updated to reflect the new fee structure and clarified that funds are not part of general state revenue.

ELIGIBILITY

Employers with a contribution rate of zero are now explicitly exempt from paying the new automation fee.

Authorizing Unemployment Automation and Administration Fund to modernize and enhance WorkForce West Virginia

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