North Carolina § 96-6 - Unemployment Insurance Fund.

§ 96-6. Unemployment Insurance Fund.

Establishment and Use. - The Unemployment Insurance Fund is established as an enterprise fund. The Division must administer the fund solely for the payment of unemployment compensation as that term is defined by section 3306(h) of the Code, exclusive of expenses of administration, and for refunds of sums erroneously paid into the fund. No money in the fund may be used, directly or indirectly, to pay interest on an advance received from the Unemployment Trust Fund. Contributions collected under this Chapter. Property or securities acquired through the use of monies belonging to the fund. Interest and investment earnings of the fund. Monies received from this State's account in the Unemployment Trust Fund in accordance with Title XII of the Social Security Act, as amended. Monies credited to this State's account in the Unemployment Trust Fund pursuant to section 903 of Title IX of the Social Security Act, as amended. Monies paid to this State pursuant to section 204 of the Federal-State Extended Unemployment Compensation Act of 1970. Reimbursement payments in lieu of contributions. Any federally mandated penalty amount assessed under G.S. 96-18(h). Amounts transferred from the Unemployment Insurance Reserve Fund. Accounts. - The State Treasurer must maintain within the fund three separate accounts: A clearing account. An unemployment trust fund account. A benefit account. Clearing Account. - The Division must credit monies payable to the Unemployment Insurance Fund to the clearing account. The Controller must immediately deposit amounts in the clearing account with the secretary of the treasury of the United States to the credit of the account of this State in the Unemployment Trust Fund. Unemployment Trust Fund Account. - The unemployment trust fund account consists of monies requisitioned from the State's account in the Unemployment Trust Fund to make refunds of overpayments of contributions. To obtain funds needed to make refunds, the Controller must requisition the amount needed from the Unemployment Trust Fund and credit the amount received to this account. Benefit Account. - The benefit account consists of monies requisitioned from the State's account in the Unemployment Trust Fund to pay benefits. To obtain funds to pay benefits under this Chapter, the Controller must requisition the amount needed from the State's account in the Unemployment Trust Fund and credit the amount received to this account. Warrants for the payment of benefits are payable from this account. Amounts in the benefit account that are not needed to pay the benefits for which they were requisitioned may be applied to the payment of benefits for succeeding periods or, in the discretion of the Controller, deposited to the credit of the State's account in the Unemployment Trust Fund. Discontinuance of Unemployment Trust Fund. - If the Unemployment Trust Fund or the State's account within the federal Fund ceases to exist, the credit balance of the State's account in that Fund must be transferred to the Unemployment Insurance Fund and credited to the benefit account. , (f) Repealed by Session Laws 2013-2, s. 1(b), effective July 1, 2013. This fund consists of the following sources of revenue: History (Ex. Sess. 1936, c. 1, ss. 9, 18; 1939, c. 27, s. 7; c. 52, s. 4; c. 208; 1941, c. 108; 1945, c. 522, s. 4; 1947, c. 326, s. 6; 1953, c. 401, ss. 1, 6; 1959, c. 362, s. 1; 1961, c. 454, ss. 1-3; 1969, c. 575, s. 3; 1971, c. 673, ss. 3, 4; 1985, c. 197, s. 2; 2006-66, s. 6.19(a); 2006-203, s. 23; 2006-221, s. 3A; 2006-259, s. 40(a); 2011-401, s. 2.5; 2012-134, s. 3(e); 2013-2, s. 1(b); 2013-224, s. 19; 2013-391, s. 1.) Editor's Note. - Session Laws 2006-66, s. 6.19(a), as added by Session Laws 2006-221, s. 3A, substituted G.S. 143B-426.39 E for G.S. 143B-426.39 B, which had been substituted for "G.S. 143-3.2" by Session Laws 2006-203, s. 23. The reference to G.S. 143B-426.39E has been changed to G.S. 143B-426.40 G at the direction of the Revisor of Statutes. Session Laws 2006-259, s. 40(a), which made identical changes to those made by Session Laws 2006-66, s. 6.19(a) as added by Session Laws 2006-221, s. 3A, was repealed, pursuant to the terms of Session Laws 2006-259, s. 40(i) upon Session Laws 2006-221 becoming law. The preamble to Session Laws 2011-10, provides: "Whereas, North Carolina's Unemployment Insurance Trust Fund balance had a deficit of $2,500,000,000, as of December 31, 2010, according to the Employment Security Commission; and "Whereas, the State owes the federal government $2,500,000,000 for loan liabilities incurred by the Employment Security Commission to continue unemployment insurance benefits payments to jobless North Carolinians during the current economic crisis; and "Whereas, the total collected by the State in unemployment insurance taxes in the 12-month period ending December 2010 amounted to $955,200,000, while the sum paid in unemployment insurance benefits for the same period totaled $1,900,000,000; and "Whereas, businesses large and small pay into the unemployment insurance system with the expectation that their contributions will be sufficient to provide assistance to their qualified former jobless employees; and "Whereas, it is in the best interest of the employers and employees of this State to have the most efficient and cost-effective unemployment insurance tax structure; and "Whereas, the current unemployment insurance tax structure no longer serves the businesses and citizens of this State in the manner required by these and future economic times; and "Whereas, major reforms regarding the unemployment insurance tax structure must be developed and implemented as soon as practicable; Now, therefore." Session Laws 2011-10, ss. 1-4, provide: "1. The General Assembly finds that the State must take swift and prudent action to address the two billion five hundred million dollars ($2,500,000,000) in debt liability for unemployment insurance benefits currently owed to the federal government and the substantial deficit in the North Carolina Unemployment Insurance Trust Fund. To that end, the Department of Commerce shall contract with an independent consulting firm specializing in unemployment insurance and employment security reform to obtain recommendations on what tax structure changes would be fair to the employers of North Carolina and how these revenues, and other financial options, might be used in servicing and liquidating the State's debt and deficits incurred to pay unemployment insurance benefits. "2. A contract to obtain services of a consultant pursuant to this act is not subject to Article 3C of Chapter 143 of the General Statutes. The consultation contract may be funded from (i) funds available within the Employment Security Commission, including State funds and any federal funds that may be used for the purposes of this act, and (ii) non-State or nongovernmental funds, grants, and in-kind contributions specifically designated for the purpose of carrying out the analysis required by this act. "3. The Department of Commerce shall provide the Fiscal Research Division and the Program Evaluation Division with periodic updates on the progress of the analysis. Within 45 days from the completion of the independent consultant's analysis, the Department of Commerce shall report to the Governor and to the General Assembly on the independent consultant's recommendations for reform of the State's unemployment insurance tax structure. "4. The Employment Security Commission and the Department of Revenue shall cooperate fully with the Department of Commerce, the Fiscal Research Division, and the Program Evaluation Division by giving all information and all data within their possession or ascertainable from their records necessary to carry out the purposes of this act." Session Laws 2013-2, s. 11, which rewrote this article, as amended by Session Laws 2013-224, s. 19, provides: "This act becomes effective July 1, 2013. Changes made by this act to unemployment benefits apply to claims for benefits filed on or after June 30, 2013. The requirements of G.S. 96-15(a1) apply to any week of an attached claim filed on or after June 30, 2013. Changes made by this act to require an account balance by an employer that is a governmental entity or a nonprofit organization and that elects to finance benefits by making reimbursable payments in lieu of contributions apply to advance payments payable for calendar quarters beginning on or after July 1, 2013. Changes made by this act to the determination and application of the contribution rate apply to contributions payable for calendar quarters beginning on or after January 1, 2014." Session Laws 2013-391, s. 9, provides in part: "Changes made by this act to unemployment benefits apply to claims for benefits filed on or after June 30, 2013. Changes made by this act to the determination and application of the contribution rate apply to contributions payable for calendar quarters beginning on or after January 1, 2014." At the direction of the Revisor of Statutes, the spelling of the word "moneys" was changed to "monies" everywhere it appears in this section. Effect of Amendments. - Session Laws 2006-66, s. 6.19(a), as added by Session Laws 2006-221, s. 3A, effective July 1, 2007, in subsections (b) and (c), substituted "G.S. 143B-426.39E" for "G.S. 143B-426.39B," which had been substituted for "G.S. 143-3.2" by Session Laws 2006-203, s. 23. See Editor's note. Session Laws 2011-401, s. 2.5, effective November 1, 2011, rewrote the section. Session Laws 2012-134, s. 3(e), effective October 1, 2013, in subsection (a), added the second sentence; added subdivision (a)(8); and deleted the last paragraph of subsection (a), which read "All moneys in the fund shall be commingled and undivided." For applicability, see Editor's note. Session Laws 2013-2, s. 1(b), rewrote the section. For effective date and applicability, see Editor's note. Session Laws 2013-391, s. 1, substituted "solely for the payment ... erroneously paid into the fund" for "exclusively for the purposes of this Chapter" in subsection (a); and redesignated former subdivision (a)(8) as present subdivision (a)(9). For applicability, see Editor's note.