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Louisiana Governor Suspends Solvency Tax

Dated Sep. 29, 2020

Citations: Proclamation No. 129 JBE 2020

SUMMARY BY TAX ANALYSTS

Louisiana Gov. John Bel Edwards (D) issued a proclamation suspending the requirement that a solvency tax be assessed on employers when the state's Unemployment Trust Fund balance is below $100 million; the governor announced that the fund's level is currently at $49.5 million, down from over $1 billion before COVID-19 disruptions.

COVID-19 PUBLIC HEALTH EMERGENCY ADDITIONAL SUSPENSION — LOUISIANA WORKFORCE COMMISSION

WHEREAS, pursuant to the Louisiana Homeland Security and Emergency Assistance and Disaster Act, La. R.S. 29:721, et seq., the Governor declared a public health emergency on March 11, 2020 in Proclamation Number 25 JBE 2020 in response to the threat posed by COVID-19;

WHEREAS, on September 11,2020, the Governor moved Louisiana to Phase 3 of Resilient Louisiana;

WHEREAS, the effects of COVID-19 on the State of Louisiana have dramatically increased the number of unemployed people in the State, draining the Unemployment Trust Fund, which before this emergency was the 17th healthiest trust fund in the country;

WHEREAS, as of September 24, 2020, the balance in the Unemployment Trust Fund totaled $49.4 million dollars;

WHEREAS, the provisions of La. R.S. 23:1536(E)(1) require the Secretary of the Louisiana Workforce Commission, as administrator of the Unemployment Trust Fund, to report if the fund balance for the next four quarters will be less than one hundred million dollars and to assess a solvency tax to replenish the trust fund;

WHEREAS, the solvency tax, if triggered in September of2020, would levy a significant tax increase on employers in April of 2021, before there can be a full recovery of the Louisiana economy from COVID-19;

WHEREAS, the requirements that the Secretary of the Workforce Commission should report a balance of below one hundred million dollars and impose a solvency tax should be suspended at this time; and

WHEREAS, it is therefore necessary to amend Proclamation Number 118 JBE 2020 to reflect this change.

NOW THEREFORE, I, JOHN BEL EDWARDS, Governor of the State of Louisiana, by virtue of the authority vested by the Constitution and the laws of the State of Louisiana, do hereby order and direct as follows:

SECTION 1: This order is meant to supplement the declaration of emergency in Proclamation Number 118 JBE 2020 and the mitigation measures therein, therefore, Proclamation Number 118 JBE 2020 shall remain in full force and effect until it expires on October 9, 2020, unless extended.

SECTION 2: Section 9 of Proclamation Number 118 JBE 2020 is hereby amended to read as follows:

a) The provision of La. R.S. 23:2600(4) shall be suspended for emergency-related claims to the extent that claimants are required to wait a period of one week before receiving benefits.

b) The provisions of La. R.S. 23:1536(E)(1) that require the Secretary of the Louisiana Workforce Commission, as administrator of the Unemployment Trust Fund, to report if the amount in the fund for the next four quarters will result in a balance of less than one hundred million dollars and to assess a solvency tax are suspended.

SECTION 3: All departments, commissions, boards, agencies and officers of the state, or any political subdivision thereof, are authorized and directed to cooperate in actions the state may take in response to the effects of this event.

SECTION 4: Unless otherwise provided in this order, these provisions are effective from Thursday, September 24, 2020 to Friday, October 9, 2020, or as extended by any subsequent Proclamation, unless terminated sooner.

IN WITNESS WHEREOF, I have set my hand officially and caused to be affixed the Great Seal of Louisiana in the City of Baton Rouge, on this 24th day of September, 2020.

John Bel Edwards
GOVERNOR OF LOUISIANA

ATTEST BY THE SECRETARY OF STATE

SECRETARY OF STATE

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