HOUSE BILL REPORT

SHB 656

BYHouse Committee on Ways & Means/Appropriations (originally sponsored by Representatives Cole, Patrick, Wang, Sayan, Holm and Todd; by request of Employment Security Department)

Establishing program and funding for services for the unemployed.

House Committe on Commerce & Labor

Majority Report:     Do pass.  (11)

     Signed by Representatives Wang, Chair; Cole, Vice Chair; Fisch, Fisher, R. King, O'Brien, Patrick, Sanders, Sayan, C. Smith and Walker.

House Staff:Linda Sellers (786-7349)

Rereferred House Committee on Ways & Means/Appropriations

Majority Report:     The substitute bill be substituted therefor and the substitute bill do pass.  (19)

     Signed by Representatives Locke, Chair; Allen, Belcher, Braddock, Brekke, Bristow, Fuhrman, Grant, Grimm, Holland, McLean, Nealey, Niemi, Peery, Sayan, Silver, L. Smith, Sprenkle and B. Williams.

House Staff:    Susan Kavanaugh (786-7145)

AS PASSED HOUSE MARCH 12, 1987

BACKGROUND:

The 1985 legislature established a temporary, two-year job service program to assist persons drawing unemployment insurance to find employment, to provide employment assistance to the agricultural industry, and to research the degree to which the Employment Security Department can contract with private agencies and organizations to provide these job placement services.  The program is administered by the Employment Security Department and will expire on July 1, 1987.  One goal of the program is to target unemployment insurance claimants for job placement early in their claim period in order to reduce the length and the amount of unemployment claims.  The legislature requested that the department prepare a report on the program by December 1, 1987.

The program is funded by a special 0.02 percent surtax that is collected solely from employers and not employees.  This surtax is accompanied by a temporary 0.02 percent reduction in the unemployment tax rates for employers in 19 of the 20 experience rated classes. If federal funding is increased to provide for these same job placement services, then this surtax would not be collected.

SUMMARY:

The job service program is made permanent.  The provision is deleted that directed the Employment Security Department to research and consider contracting with private employment agencies for job placement services.

A permanent 0.02 percent reduction in the contribution rate for employers in 19 of the 20 experience rated classes is created, as is a permanent 0.02 percent surtax.  Sums collected from this surtax are to be used for the job service program.

Six million three hundred fifty thousand dollars is appropriated from this special account for the 1988-1989 biennium.  However, if federal funding for services provided by the job program is increased, this appropriation will be reduced by the same amount that federal funding is increased, and the savings will be deposited in the unemployment compensation fund.

Appropriation:  $6,350,000 from the unemployment insurance administrative contingency fund to the Employment Security Department.

Fiscal Note:    Attached.

House Committee ‑ Testified For:     (Commerce & Labor)  Graeme Sackrison, Jim DeBlasio, and Barbara Flaherty, Employment Security.

(Ways & Means/Appropriations)  Representative Art Wang and Graeme Sackrison.

House Committee - Testified Against: (Commerce & Labor)  None Presented.

(Ways & Means/Appropriations)  None Presented.

House Committee - Testimony For:     (Commerce & Labor)  The pilot job service program should be made permanent because it has proven its effectiveness in returning unemployment insurance claimants to the workforce, and has resulted in a significant savings to the Unemployment Insurance Trust Fund.

(Ways & Means/Appropriations)  Project has proved effective at getting people back to work sooner than expected and has reduced outlays for unemployment insurance claims.

House Committee - Testimony Against: (Commerce & Labor)  None Presented.

(Ways & Means/Appropriations)  None Presented.