Brief⁽¹⁾

H.B. 2645 would extend the moratorium on employment security taxes for a fifth year (calendar year 1999) for positive balance employers. Ineligible employers would pay a 1.0 percent tax for 1999. A safety measure in the bill provides that, if the reserve fund ratio drops below 1.75 percent of total wages, the moratorium would cease to exist and employment security taxes from employers would resume. The current level for the safety measure is at the 2 percent level of total wages. At the end of the moratorium (CY 2000) employers would again have to pay employment security taxes on a phased-in basis.

The bill will be placed on the consent calendar.

Background

The Chairperson of the House Business, Commerce, and Labor Committee spoke in favor of the bill. Others expressing support for the measure included conferees representing the Kansas AFL-CIO, the Kansas Chamber of Commerce and Industry, and the Department of Human Resources.

The fiscal note indicates no fiscal impact.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext-bill.html.