124th MAINE LEGISLATURE
		LD 1626		LR 2110(02)
	An Act To Amend the Unemployment Compensation Laws Regarding Vacation Pay
	Fiscal Note for Bill as Amended by Committee Amendment "   "
	Committee: Labor
	Fiscal Note Required: Yes
Fiscal Note
Current biennium cost increase - Unemployment Compensation Trust Fund Potential future biennium revenue increase - Unemployment Compensation Trust Fund
			2009-10	2010-11	Projections 2011-12	Projections 2012-13
Net Cost (Savings)
	General Fund		$0	$34,520	$34,520	$34,520
	Highway Fund		$0	$18,820	$18,820	$18,820
Appropriations/Allocations
	General Fund		$0	$34,520	$34,520	$34,520
	Highway Fund		$0	$18,820	$18,820	$18,820
Fiscal Detail and Notes
	Removing vacation pay as a deductible income when calculating a claimant's unemployment compensation benefit amount will increase costs to the Unemployment Compensation Trust Fund beginning in fiscal year 2009-10 due to an increase in benefit payments.  An analysis performed by the Department of Labor's Center for Workforce Research and Information estimates the increase in benefit costs to be between 0.7% and 0.8% of total regular benefits.  If this provision had been in place in 2007, the estimated increase in benefit costs would have been between $800,000 and $850,000 based on total regular benefit costs of $113.96 million.  If this provision had been in place during the recession year of 2009, the estimated increase would have been between $1.8 million and $2.0 million, based on total regular benefit costs of $254.0 million.
	This expansion of benefits may potentially affect the contribution rate schedule in future biennia.  The impact to all employers and the timing of the impact can not be determined at this time and will depend on the level of benefits paid, contributions received and the balance of the trust fund when the contribution schedule is calculated.
	This bill will increase unemployment costs for executive branch departments and agencies that are in direct reimbursement status.  The annual General Fund cost is estimated to be $30,047, the Highway Fund cost is estimated to be $18,820 and the cost to other state funds is estimated to be $20,443 beginning in fiscal year 2010-11.  A General Fund appropriation and a Highway Fund allocation are included to set aside funds for the estimated General Fund and Highway Fund costs, respectively.
	This bill also includes General Fund appropriations in fiscal year 2010-11 to the Legislature and the Judicial Department of $3,825 and $648, respectively, for the costs to these departments.