OLR Bill Analysis

HB 6459 (File 73, as amended by Senate "A")*

AN ACT CONCERNING THE REPEAL OF THE OBSOLETE STATE HIRING INCENTIVE TAX CREDIT.

SUMMARY:

This bill repeals the corporate tax credit for employers hiring people receiving Temporary Family Assistance (TFA). Current law makes the credit available to employers hiring TFA recipients for at least 30 hours a week. It gives businesses a credit of up to $ 125 per month when they hire people who have been receiving TFA benefits for at least nine months.

The bill also preserves good cause for late filings for unemployment compensation appeals that meet certain criteria the bill sets.

It also exempts an employer from paying unemployment compensation charges for an employee the employer fired because the person was denied a special motor vehicle operating permit to drive to and from work. Such work-only permits are typically allowed in certain driving under the influence of alcohol (DUI). The non-charge provision for the employer does not have any bearing on whether the employee will be eligible for benefits (i. e. , it will still depend upon whether the former employee meets the existing criteria).

The bill changes unemployment compensation law to require the state, municipalities, other political subdivisions of the state, and tribal employers that do not pay unemployment taxes to reimburse the unemployment compensation fund for 100% of the benefits paid as part of a state extended benefit period. By law, certain employers can choose to reimburse the unemployment compensation fund for benefits to former employees rather than, as most employers must, pay unemployment taxes on an ongoing basis (see BACKGROUND).

*Senate Amendment “A” adds the provisions (1) preserving good cause for certain late appeals, (2) exempting employers from unemployment benefit charges for employees fired due to denial for a special driving permit, and (3) requiring certain employers to reimburse the unemployment fund 100% for state extended benefit periods.

EFFECTIVE DATE: October 1, 2009, except the repeal of the tax credit is effective upon passage and applicable to income years commencing on or after January 1, 2009.

PRESERVING GOOD CAUSE FOR CERTAIN LATE UNEMPLOYMENT COMPENSATION APPEALS

Under current law, an unemployment compensation claimant has 21 days to appeal a decision that he or she received either (1) an overpayment of benefits or (2) benefits through fraud. This bill allows appeals after 21 days of either type of decision if the claimant shows good cause for the late filing. Under law and unchanged by the bill, the 21 days for appeal begins when the decision notice is mailed to the claimant.

It permits an appeal or motion to be timely within the 21-day period if it bears a U. S. Postal Service postmark indicating it was mailed within 21 days. It specifies that appeals with postmarks from private postage meters are not timely if received after the 21 days.

BACKGROUND

The State, Municipalities, and Tribal Employers

By law, some employers, such as the state, municipalities, other political subdivisions, and tribal employers are given the option of (1) paying unemployment taxes or (2) reimbursing the unemployment compensation fund with payments in lieu of taxes to cover the amount of benefits paid to the former employees who are collecting benefits.

Special Permits: Work-Only Driver's Permits

By law, anyone who has had a driver's license suspended may apply for a special driving permit that allows certain work-related driving. Such a permit may not be granted to a person (1) with a previous suspension; (2) who operated a vehicle while under suspension; (3) who failed to appear for trial; or (4) who is under suspension for refusing to submit to a DUI blood, breath, or urine test until at least 90 days of his mandatory six-month suspension has run. By law, people are ineligible if they have been previously convicted of DUI.

Benefits Due to Fraud and Overpayments

By law, a claimant found to have received benefits through fraud must repay the benefits and may be ordered to pay other penalties. The labor commissioner, or her designee, makes determinations of fraud after holding a hearing, of which the claimant is notified, to help determine the facts.

By law, a claimant can be charged for a benefit overpayment if he or she received an amount that was greater than what was due under law, as long as the error causing the overpayment is discovered and brought to the claimant's attention within a year of the receipt of the benefits. Claims examiners make overpayment determinations.

COMMITTEE ACTION

Labor and Public Employees Committee

Joint Favorable

Finance, Revenue and Bonding Committee

Joint Favorable