SF 607: A bill for an act relating to unemployment insurance taxes on employers. - Iowa

Enrolled with Governor's Action → Reprinted Marked Up · 5 edits

MODERATE

This bill amends Iowa's unemployment insurance tax laws by updating the definition of taxable wages, adjusting contribution rates for new employers, and modifying the reserve fund ratio calculation. The changes aim to improve the state's unemployment insurance fund stability while ensuring fair contribution rates based on employer experience ratings.

Scope change

The bill applies to all employers subject to Iowa's unemployment insurance system, with specific provisions for nonconstruction and construction/landscaping employers who are newly subject to the chapter.

DEFINITION

Updated the definition of 'taxable wages' to clarify that it includes wages paid in Iowa or other states that extend comity to Iowa, ensuring consistent tax treatment across jurisdictions.

REQUIREMENT

Adjusted contribution rate requirements for new employers, specifying different rates for nonconstruction employers versus construction/landscaping employers based on their benefit ratio rank.

Updated the contribution rate tables and benefit ratio rank calculations to better distribute tax burdens among employers based on their experience ratings.

FISCAL

Modified the reserve fund ratio calculation method, including provisions for adding $150 million to available funds when computing the ratio beginning July 1, 2007.

TECHNICAL

Changed formatting and presentation of the bill text from enrolled version to marked-up version, including changes in line breaks and spacing throughout the document.

Enrolled → Enrolled with Governor's Action · 5 edits · Jun 5, 2025

MODERATE

This bill updates Iowa's unemployment insurance tax structure by redefining 'taxable wages' and adjusting contribution rates for new employers. It establishes specific contribution rate tables based on employer experience ratings and modifies how reserve fund ratios are calculated, including a permanent $150 million addition to available funds starting July 1, 2007.

Scope change

The bill applies to all employers subject to Iowa's unemployment insurance chapter, with specific provisions for nonconstruction and construction/landscaping employers who are newly subject to the chapter.

DEFINITION

Redefines 'taxable wages' to equal the greater of a calculated percentage of statewide average weekly wages or wages subject to federal unemployment tax credit.

REQUIREMENT

Sets specific contribution rates for new employers based on whether they are construction/nonconstruction employers, requiring them to pay at specified benefit ratio ranks until meeting twelve consecutive quarters of coverage.

Establishes detailed contribution rate tables with nine benefit ratio ranks and specific percentage thresholds for wage distribution.

FISCAL

Modifies reserve fund ratio calculations by adding $150 million to total funds available for benefit payments starting July 1, 2007.

TECHNICAL

Updates formatting and numbering conventions throughout the bill text to align with current legislative standards.

Reprinted Marked Up → Reprinted · 3 edits

MINOR

This bill reprints the text of Senate File 607 in a cleaner format without the Governor's signature page and removes the original employer savings section. The substantive policy content regarding unemployment insurance tax rates and definitions remains unchanged.

TECHNICAL

Removed the Governor's signature page, certification text, and original formatting artifacts from the 'Reprinted Marked Up' version.

Added committee and filing metadata headers indicating the bill was passed by the Senate and is a successor to previous bills.

REQUIREMENT

Deleted Section 7, which previously required employers to use tax savings for employee salaries, benefits, or seasonal unemployment alternatives.

Signed Enrolled Bill (PDF) → Enrolled · 6 edits · Jun 5, 2025

MODERATE

This bill updates Iowa's unemployment insurance tax system by clarifying definitions of taxable wages, adjusting contribution rate calculations for new employers, and establishing a tiered contribution rate structure based on employer experience ratings. The changes standardize how employers calculate their tax obligations and ensure savings from lower tax rates are used for employee benefits or seasonal unemployment support.

DEFINITION

Clarified the definition of taxable wages to include wages paid by employers or their predecessors in this or other states with reciprocal agreements.

REQUIREMENT

Updated contribution rate rules for new nonconstruction employers to use the twelfth fourth benefit ratio rank with a minimum one percent rate until twelve quarters of benefit charges.

Modified contribution rate rules for new construction or landscaping employers to use the twenty-first ninth benefit ratio rank.

Added requirements that employer tax savings must be used for employee salaries/benefits or as alternative unemployment benefits during seasonal unemployment.

FISCAL

Established a tiered contribution rate table with four categories (A, B, C, D) based on current reserve fund ratios, ranging from 0.00 to 5.40 percent.

TECHNICAL

Corrected formatting errors and standardized section numbering throughout the enrolled bill text.

Introduced → Signed Enrolled Bill (PDF) · 5 edits · Jun 5, 2025

MODERATE

This bill modifies Iowa's unemployment insurance tax system by reducing the taxable wage base calculation from 66.67% to 33.33% of the statewide average weekly wage, which will lower the maximum taxable wages for most employers. The bill also updates the reserve fund ratio calculation, adjusts contribution rate tables, and introduces a new surcharge for employers with high benefit ratios.

Scope change

The bill applies to all employers subject to Iowa unemployment insurance taxes, with specific provisions for nonconstruction and construction/landscaping employers regarding initial contribution rates.

DEFINITION

Reduced the percentage of statewide average weekly wage used to calculate taxable wages from 66.67% to 33.33%, which will decrease the maximum taxable wage base for most employers.

FISCAL

Removed the provision that added $150 million to the unemployment compensation fund when calculating the reserve fund ratio.

REQUIREMENT

Added a new surcharge requiring employers with average benefit ratios of 1.25 or higher to pay an additional 10% of their contributions.

Simplified the contribution rate tables from eight possible tables to four tables, reducing administrative complexity.

ELIGIBILITY

Established different initial contribution rates for newly subject nonconstruction employers versus construction/landscaping employers.

A bill for an act relating to unemployment insurance taxes on employers.

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