An Act to modify requirements for payment of the employer's investment in South Dakota's future fee.

Be it enacted by the Legislature of the State of South Dakota:

Section 1. That § 61-5-29 be AMENDED:

61-5-29. Employers required by this title to pay contributions, except employers pursuant to chapter 61-5A, that reimburse the unemployment compensation trust fund for benefits paid in lieu of contributions, shall, unless opting out pursuant to section 2 of this Act, also pay an employer's investment in South Dakota's future fee, hereinafter referred to as the investment fee, on wages as defined by this title. The investment fee rate for employers subject to this section, not eligible for experience rating, as provided for in § 61-5-24, must be is seventy-hundredths percent through calendar year 2006 and fifty-five hundredths percent on and after January 1, 2007. If an employer subject to this section is eligible for experience rating, the employer's reserve ratio must be determined pursuant to § 61-5-25.3 through calendar year 2017, pursuant to § 61-5-25.4 for calendar years 2018 and 2019, pursuant to § 61-5-25.5 for calendar year 2020 through calendar year 2023, pursuant to § 61-5-25.6 for calendar year 2024 through calendar year 2025, and pursuant to § 61-5-25.7 for calendar year 2026 and each year thereafter, and the employer's investment fee rate must be the rate appearing in column "A" on the same line the employer's reserve ratio appears in column "B" of the following rate schedule:

The Notwithstanding section 2 of this Act, the terms and conditions of this title that apply to the payment and collection of contributions also apply to the payment and collection of the investment fee. The department shall deposit the proceeds from the investment fee in the clearing account of the unemployment compensation fund for clearance only. The proceeds may not become part of the fund. After clearance, the department must shall deposit the money derived from the investment fee payments, less refunds made pursuant to the provisions of this title, in the employer's investment in South Dakota's future fund, as provided for in § 61-5-29.1. No investment fee payment may be credited to the employer's experience-rating account, nor may the payment be deducted in whole or in part by any employer from the wages of individuals in its employ.

The investment fee rate may not be increased over the applicable 1987 investment fee rate for any employer with a positive balance in the employer's experience-rating account on the computation date, as established in rules promulgated by the secretary of labor and regulation, in accordance with chapter 1-26, for the current year and the year preceding the current year.

The investment rates provided in this section apply to and are retroactive to taxable wages paid on and after January 1, 1993.

Section 2. That a NEW SECTION be added to chapter 61-5:

The department shall develop a form for opting in to or out of paying the employer's investment in South Dakota's future fee created by § 61-5-29. The form must fit on one sheet of paper no bigger than 8.5 inches by eleven inches.

The department shall publish the form on its website and distribute at the beginning of each calendar quarter a physical copy of the form to each employer subject to § 61-5-29, until the employer submits a completed form to the department. The department shall provide methods for submitting the form either physically or electronically.

The department shall deem all employers that have not opted in to paying the fee as having opted out, regardless of whether they have submitted a completed form. An employer that has opted out of paying the fee is not required to pay the fee and is not subject to the terms and conditions of this title that apply to the payment and collection of the fee. If an employer opts out of paying the fee, the department may not impose any penalty or other consequence on the employer for nonpayment of the fee.

If any employer opts in to paying the fee, the employer is then subject to the terms and conditions of this title that apply to the payment and collection of the fee at the beginning of the following calendar quarter after the department receives the form indicating the employer has opted in.

If an employer that has opted in wants to subsequently opt out, the employer must submit a new form to the department. An employer that previously opted in is no longer required to pay the fee, and is no longer subject to the terms and conditions of this title that apply to the payment and collection of the fee, at the beginning of the following calendar quarter after the department receives the form indicating the employer has opted out.