SENATE, No. 1225

 

STATE OF NEW JERSEY

 

INTRODUCED JUNE 3, 1996

 

 

By Senators SINAGRA and LYNCH

 

 

An Act concerning extended unemployment insurance benefits and amending P.L.1970, c.324.

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1. Section 5 of P.L.1970, c.324 (C.43:21-24.11) is amended to read as follows:

    5. For the purposes of the extended benefit program and as used in this act, unless the context clearly requires otherwise:

    a. "Extended benefit period" means a period which

    (1) Begins with the third week after a week for which there is a state "on" indicator; and

    (2) Ends with either of the following weeks, whichever occurs later:

    (a) The third week after the first week for which there is a state "off" indicator; or

    (b) The thirteenth consecutive week of such period; provided, that no extended benefit period may begin by reason of a state "on" indicator before the fourteenth week after the close of a prior extended benefit period which was in effect with respect to this State; and provided further, that no extended benefit period may become effective in this State prior to the effective date of this act.

    b. (Deleted by amendment.)

    c. (Deleted by amendment.)

    d. There is a "state 'on' indicator" for this State for a week if [the]:

    (1) The division determines, in accordance with the regulations of the United States Secretary of Labor, that for the period consisting of the respective week and the immediately preceding 12 weeks, the rate of insured unemployment (not seasonally adjusted) under the [Unemployment Compensation Law] "unemployment compensation law" (R.S.43:21-1 et seq.):

    [(1)] (a) Equaled or exceeded 120% of the average of these rates for the corresponding 13-week period during each of the preceding 2 calendar years, and [equaled or exceeded 4%; provided that], for weeks beginning after September 25, 1982, [the rate] equaled or exceeded 5%; or

    [(2)] (b) With respect to benefits for weeks of unemployment beginning after [March 30, 1977, equaled or exceeded 5%; provided that for weeks beginning after] September 25, 1982, [the rate] equaled or exceeded 6%; or

    (2) With respect to any week of unemployment beginning after June 30, 1996, the average seasonally adjusted rate of total unemployment in the State, as determined by the United States Secretary of Labor for the most recent three-month period for which data for all states are published before the close of that week:

    (a) Equals or exceeds 6.5%; and

    (b) Equals or exceeds 110% of the average seasonally adjusted rate of total unemployment in the State during either of the corresponding three-month periods ending in the two preceding calendar years.

    e. There is a "state 'off' indicator" for this State for a week if the division determines, in accordance with the regulations of the United States Secretary of Labor, that for the period consisting of the respective week and the immediately preceding 12 weeks, neither [subparagraph] paragraph (1) or (2) of [paragraph] subsection d. was satisfied.

    f. "Rate of insured unemployment," for purposes of subsections d. and e. means the percentage derived by dividing

    (1) The average weekly number of individuals filing claims for regular benefits in this State for weeks of unemployment with respect to the most recent 13-consecutive-week period, as determined by the division on the basis of its reports to the United States Secretary of Labor, by

    (2) The average monthly covered employment for the specified period.

    g. "Regular benefits" means benefits payable to an individual under the [Unemployment Compensation Law] "unemployment compensation law" (R.S.43:21-1 et seq.) or under any other State law (including benefits payable to federal civilian employees and to ex-servicemen pursuant to 5 U.S.C. [chapter 85] 8501 et seq.) other than extended benefits.

    h. "Extended benefits" means benefits (including benefits payable to federal civilian employees and to ex-servicemen pursuant to 5 U.S.C. [chapter 85] 8501 et seq.) payable to an individual under the provisions of this act for weeks of unemployment in his eligibility period.

    i. "Eligibility period" of an individual means the period consisting of the weeks in his benefit year which begin in an extended benefit period and, if his benefit year ends within the extended benefit period, any weeks thereafter which begin in the period.

    j. "Exhaustee" means an individual who, with respect to any week of unemployment in his eligibility period:

    (1) Has received prior to the week, all of the regular benefits that were available to him under the [Unemployment Compensation Law] "unemployment compensation law" or any other State law (including dependents' allowances and benefits payable to federal civilian employees and ex-servicemen under 5 U.S.C. [chapter 85] 8501 et seq.) in his current benefit year that includes such week, provided, that for the purposes of this [subparagraph] paragraph, an individual shall be deemed to have received all of the regular benefits that were available to him although as a result of a pending appeal with respect to wages and/or employment that were not considered in the original monetary determination in his benefit year, he may subsequently be determined to be entitled to added regular benefits; or

    (2) His benefit year having expired prior to such week, has no, or insufficient, wages and/or employment on the basis of which he could establish a new benefit year that would include such week; and

    (3) (a) has no right to unemployment benefits or allowances, as the case may be, under the Railroad Unemployment Insurance Act, the Trade Expansion Act of 1962, the Automotive Products Trade Act of 1965 and such other federal laws as are specified in regulations issued by the United States Secretary of Labor; and

    (b) has not received and is not seeking unemployment benefits under the Unemployment Compensation Law of Canada; but if he is seeking these benefits and the appropriate agency finally determines that he is not entitled to benefits under that law he is considered an exhaustee if the other provisions of this definition are met.

    k. "State law" means the unemployment insurance law of any state approved by the United States Secretary of Labor under section 3304 of the Internal Revenue Code of [1954] 1986, 26 U.S.C.§3304.

    l. "High unemployment period" means any period during which the average seasonally adjusted rate of total unemployment in the State, as determined by the United States Secretary of Labor for the most recent three-month period for which data for all states are published:

    (1) Equals or exceeds 8%; and

    (2) Equals or exceeds 110% of the average seasonally adjusted rate of total unemployment in the State during either of the corresponding three-month periods ending in the two preceding calendar years.

(cf: P.L.1982, c.144, s.1)

 

    2. Section 9 of P.L.1970, c.324 (C.43:21-24.15) is amended to read as follows:

    9. [The] a. Except as provided in subsection b. of this section, the total extended benefit amount payable to any eligible individual with respect to his applicable benefit year shall be the lesser of the following amounts:

    [a.] (1) 50% of the total of regular benefits which were payable to him under the [Unemployment Compensation Law] "unemployment compensation law" (R.S.43:21-1 et seq.) in his applicable benefit year; or

    [b.] (2) thirteen times his weekly benefit amount which was payable to him under the [Unemployment Compensation Law] "unemployment compensation law" (R.S.43:21-1 et seq.) for a week of total unemployment in the applicable benefit year.

    b. With respect to weeks beginning during a high unemployment period, the total extended benefit amount payable to an eligible individual with respect to his applicable benefit year shall be the lesser of the following amounts:

    (1) 80% of the total of regular benefits which were payable to the individual under the "unemployment compensation law" (R.S.43:21-1 et seq.) during the applicable benefit year; or

    (2) Twenty times the weekly benefit amount which was payable to the individual under the "unemployment compensation law" (R.S.43:21-1 et seq.) for a week of total unemployment during the applicable benefit year.

    c. Notwithstanding any other provisions of the [Unemployment Compensation Law] "unemployment compensation law" (R.S.43:21-1 et seq.), if the benefit year of an adversely affected worker covered by a certification under subchapter A, chapter 2, Title II of the Trade Act of 1974, P.L.93-618, [5 U.S.C.5312 et seq.] 19 U.S.C.§2271 et seq. as amended, ends within an extended benefit period, the remaining balance of extended benefits that the individual would, but for this section, be entitled to receive in that extended benefit period, with respect to weeks of unemployment beginning after the end of the benefit year, shall be reduced (but not below zero) by the product of the number of weeks for which the individual received any amounts as trade readjustment allowances within that benefit year, multiplied by the individual's weekly benefit amount for extended benefits.

(cf: P.L.1982, c.144, s.3)

 

    3. This act shall take effect immediately.

 

 

STATEMENT

 

    This bill modifies the conditions under which extended unemployment insurance (UI) benefits are made available to laid off workers who exhaust their regular UI benefits but are not able to obtain employment.

    The provisions of the bill regarding extended UI benefits are based on the federal Unemployment Compensation Amendments of 1992, Pub.L.102-318. That law permits each state to enact legislation to provide an alternative unemployment threshold or "trigger" to start a program under which the State and the federal government share the costs of the benefits on a 50-50 basis.

    This bill contains that alternative trigger, which provides 13 weeks of extended benefits for each worker if the State's total unemployment rate is 6.5% or more and is also at least 10% higher than the rate for the corresponding 13-week period during either of the preceding two calendar years. Twenty weeks of extended benefits are provided if the State's total unemployment rate reaches 8%. The cost of the extended benefits is shared equally by the State and the federal government.

    Under current State law, the trigger for 50-50 State/federal extended employment benefits is that New Jersey must have an insured unemployment rate of at least 6% or at least 5% and also at least 20% higher than the average rate for the corresponding 13-week period during both of the preceding two calendar years. This trigger was unattainable for New Jersey and most other states during the recent recession, because most unemployed workers do not receive regular unemployment benefits and therefore are not counted when the insured unemployment rate is calculated. Throughout the period from 1990 to 1995, New Jersey's insured unemployment rate remained well below 5% even when the State's total unemployment rate rose above 9%. Before 1984, extended benefits were available in most states, including New Jersey, only due to the more attainable trigger for the 100% federally-funded emergency unemployment program.

    This bill is designed to help alleviate the pain inflicted by long-term unemployment on many New Jersey households, including home mortgage foreclosures, severe depression, increased substance abuse, marital breakups and even suicides.

    For the last three years, New Jersey has had the highest rate of any state in the percentage of laid-off workers exhausting their UI benefits without being able to find new work. During the last four years more than 500,000 New Jersey workers ran out of all federal and State UI benefits. The State has also had the highest home mortgage foreclosure rate in the United States. During that time, New Jersey's home foreclosure rate was more than twice as high as any time in the recessions of the 1970's and the 1980's. More New Jersey citizens filed for personal bankruptcy in 1995 than in any previous year and their average debt was the highest in the nation.

 

 

                             

 

Concerns extended UI benefits.