SENATE BILL No. 1520

November 14, 2002, Introduced by Senator BENNETT and referred to the Committee on

Appropriations.

A bill to amend 1936 (Ex Sess) PA 1, entitled

"Michigan employment security act,"

by amending section 10 (MCL 421.10), as amended by 2002 PA 192.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 10. (1) There is created in the department of treasury

2 a special fund to be known and designated as the administration

3 fund (Michigan employment security act). Any balances in the

4 administration fund at the end of any fiscal year of this state

5 shall be carried over as a part of the administration fund and

6 shall not revert to the general fund of this state. Except as

7 otherwise provided in subsection (3), all money deposited into

8 the administration fund under this act shall be appropriated by

9 the legislature to the unemployment agency to pay the expenses of

10 the administration of this act.

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1 (2) The administration fund shall be credited with all money

2 appropriated to the fund by the legislature, all money received

3 from the United States or any agency of the United States for

4 that purpose, and all money received by this state for the fund.

5 All money in the administration fund that is received from the

6 federal government or any agency of the federal government or

7 that is appropriated by this state for the purposes of this act,

8 except money requisitioned from the account of this state in the

9 unemployment trust fund pursuant to a specific appropriation made

10 by the legislature in accordance with section 903(c)(2) of title

11 IX of the social security act, 42 U.S.C. 1103, and with section

12 17(3)(f), shall be expended solely for the purposes and in the

13 amounts found necessary by the appropriate agency of the United

14 States and the legislature for the proper and efficient adminis-

15 tration of this act.

16 (3) All money requisitioned from the account of this state

17 in the unemployment trust fund pursuant to a specific appropria-

18 tion made by the legislature in accordance with section 903(c)(2)

19 of title IX of the social security act, 42 U.S.C. 1103, and with

20 section 17(3)(f), shall be deposited in the administration fund.

21 Any money that remains unexpended at the close of the 2-year

22 period beginning on the date of enactment of a specific appropri-

23 ation shall be immediately redeposited with the secretary of the

24 treasury of the United States to the credit of this state's

25 account in the unemployment trust fund; or any money that for any

26 reason cannot be expended or is not to be expended for the

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1 purpose for which appropriated before the close of this 2-year

2 period shall be redeposited at the earliest practicable date.

3 (4) If any money received after June 30, 1941, from the

4 appropriate agency of the United States under title III of the

5 social security act, CHAPTER 531, 49 STAT. 620, 42 U.S.C. 501 to

6 504, or any unencumbered balances in the administration fund

7 (Michigan employment security act) as of that date, or any money

8 granted after that date to this state pursuant to UNDER the

9 Wagner-Peyser act, chapter 49, 48 Stat. 113, or any money made

10 available by this state or its political subdivisions and matched

11 by money granted to this state pursuant to UNDER the

12 Wagner-Peyser act, chapter 49, 48 Stat. 113, is found by the

13 appropriate agency of the United States, because of any action or

14 contingency, to have been lost or been expended for purposes

15 other than, or in amounts in excess of, those found necessary by

16 that agency of the United States for the proper administration of

17 this act, the money shall be replaced by money appropriated for

18 that purpose from the general funds of this state to the adminis-

19 tration fund (Michigan employment security act) for expenditure

20 as provided in this act. Upon receipt of notice of such a find-

21 ing by the appropriate agency of the United States, the commis-

22 sion shall promptly report the amount required for replacement to

23 the governor and the governor shall, at the earliest opportunity,

24 submit to the legislature a request for the appropriation of that

25 amount. This subsection shall not be construed to relieve this

26 state of its obligation with respect to funds received prior to

27 July 1, 1941, pursuant to UNDER the provisions of title III of

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1 the social security act, CHAPTER 531, 49 STAT. 620, 42 U.S.C. 501

2 to 504.

3 (5) If any funds expended or disbursed by the commission are

4 found by the appropriate agency of the United States to have been

5 lost or expended for purposes other than, or in amounts in excess

6 of, those found necessary by that agency of the United States for

7 the proper administration of this act, and if these funds are

8 replaced as provided in subsection (4) by money appropriated for

9 that purpose from the general fund of this state, then the direc-

10 tor who approved the expenditure or disbursement of those funds

11 for those purposes or in those amounts, shall be liable to this

12 state in an amount equal to the sum of money appropriated to

13 replace those funds. The director shall be required by the gov-

14 ernor to post a proper bond in a sum not less than $25,000.00 to

15 cover his or her liability as prescribed in this section, the

16 cost of the bond to be paid from the general fund of this state.

17 (6) There is created in the department of treasury a sepa-

18 rate fund to be known as the contingent fund (Michigan employment

19 security act) into which shall be deposited all solvency taxes

20 collected under section 19a and all interest on contributions,

21 penalties, and damages collected under this act. Except as oth-

22 erwise provided in subsections (7), and (8), AND (9), all

23 amounts in the contingent fund (Michigan employment security act)

24 and all earnings on those amounts are continuously appropriated

25 without regard to fiscal year for the administration of the unem-

26 ployment agency and for the payment of interest on advances from

27 the federal government to the unemployment compensation fund

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1 under section 1201 of title XII of the social security act,

2 42 U.S.C. 1321, to be expended only if authorized by the unem-

3 ployment agency. Money deposited from the solvency taxes col-

4 lected pursuant to UNDER section 19a shall not be used for the

5 administration of the unemployment agency, except for the repay-

6 ment of loans from the state treasury and interest on loans made

7 under section 19a(3). However, an authorization or expenditure

8 shall not be made as a substitution for a grant of federal funds

9 or for any portion of a grant that, in the absence of an authori-

10 zation, would be available to the commission. Immediately upon

11 receipt of administrative grants from the appropriate agency of

12 the United States to cover administrative costs for which the

13 commission has authorized and made expenditures from the contin-

14 gent fund, those grants shall be transferred to the contingent

15 fund to the extent necessary to reimburse the contingent fund for

16 the amount of those expenditures. Amounts needed to refund

17 interest, damages, and penalties erroneously collected shall be

18 withdrawn and expended for those purposes from the contingent

19 fund upon order of the unemployment agency. Any amount autho-

20 rized to be expended for administration pursuant to UNDER this

21 section may be transferred to the administration fund. An amount

22 not needed for the purpose for which authorized shall, upon order

23 of the unemployment agency, be returned to the contingent fund.

24 Amounts needed to refund erroneously collected solvency taxes

25 shall be withdrawn and expended for that purpose upon order of

26 the unemployment agency.

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1 (7) On June 30, 2002, the unemployment agency shall

2 authorize the withdrawal of $79,500,000.00 from the contingent

3 fund (Michigan employment security act) for deposit into the gen-

4 eral fund.

5 (8) At the close of the state fiscal year in 2002 and each

6 year after 2002, all funds in the contingent fund (Michigan

7 employment security act) in excess of $15,000,000.00 shall lapse

8 to the unemployment trust fund.

9 (9) THE UNEMPLOYMENT AGENCY SHALL AUTHORIZE THE WITHDRAWAL

10 OF $10,000,000.00 FROM THE CONTINGENT FUND (MICHIGAN EMPLOYMENT

11 SECURITY ACT) FOR DEPOSIT INTO THE GENERAL FUND FOR EACH FISCAL

12 YEAR STARTING WITH THE FISCAL YEAR ENDING SEPTEMBER 30, 2002 AND

13 CONTINUING EACH FISCAL YEAR THROUGH THE CLOSE OF THE FISCAL YEAR

14 ENDING SEPTEMBER 30, 2004.

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