Senate File 607 - Reprinted SENATE FILE 607 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SF 504) (SUCCESSOR TO SSB 1173) (As Amended and Passed by the Senate May 14, 2025 ) A BILL FOR An Act relating to unemployment insurance taxes on employers. 1 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 2 SF 607 (2) 91 je/js/mb

S.F. 607 Section 1. Section 96.1A, subsection 36, Code 2025, is 1 amended to read as follows: 2 36. “Taxable wages” means an amount of wages upon which 3 an employer is required to contribute based upon wages which 4 that have been paid in this state during a calendar year to 5 an individual by an employer or the employer’s predecessor , 6 in this state or another state which extends a like comity to 7 this state, with respect to employment, upon which the employer 8 is required to contribute, which equals the greater of the 9 following: 10 a. Sixty-six and two-thirds Thirty-three and one-third 11 percent of the statewide average weekly wage which that was 12 used during the previous calendar year to determine maximum 13 weekly benefit amounts, multiplied by fifty-two and rounded to 14 the next highest multiple of one hundred dollars. 15 b. That portion of wages subject to a tax under a federal 16 law imposing a tax against which credit may be taken for 17 contributions required to be paid into a state unemployment 18 compensation fund. 19 Sec. 2. Section 96.7, subsection 2, paragraph c, 20 subparagraphs (1) and (2), Code 2025, are amended to read as 21 follows: 22 (1) A nonconstruction contributory employer newly subject 23 to this chapter shall pay contributions at the rate specified 24 in the twelfth fourth benefit ratio rank but not less than 25 one percent until the end of the calendar year in which the 26 employer’s account has been chargeable with benefits for 27 twelve consecutive calendar quarters immediately preceding the 28 computation date. 29 (2) A construction or landscaping contributory employer, 30 as defined under rules adopted by the department pursuant to 31 chapter 17A , which that is newly subject to this chapter shall 32 pay contributions at the rate specified in the twenty-first 33 ninth benefit ratio rank until the end of the calendar year in 34 which the employer’s account has been chargeable with benefits 35 -1- SF 607 (2) 91 je/js/mb 1/ 4

S.F. 607 for twelve consecutive calendar quarters. 1 Sec. 3. Section 96.7, subsection 2, paragraph d, 2 subparagraph (1), Code 2025, is amended to read as follows: 3 (1) The current reserve fund ratio is computed by dividing 4 the total funds available for payment of benefits, on the 5 computation date or on August 15 following the computation 6 date if the total funds available for payment of benefits is a 7 higher amount on August 15, by the total wages paid in covered 8 employment excluding reimbursable employment wages during the 9 first four calendar quarters of the five calendar quarters 10 year immediately preceding the computation date. However, 11 in computing the current reserve fund ratio, beginning July 12 1, 2007, one hundred fifty million dollars shall be added to 13 the total funds available for payment of benefits on each 14 computation date. 15 Sec. 4. Section 96.7, subsection 2, paragraph d, 16 subparagraph (2), subparagraph division (a), Code 2025, is 17 amended by striking the subparagraph division. 18 Sec. 5. Section 96.7, subsection 2, paragraph d, 19 subparagraph (2), subparagraph division (b), Code 2025, is 20 amended by striking the subparagraph division and inserting in 21 lieu thereof the following: 22 (b) If the current reserve fund ratio: 23 Equals or But is The contribution rate 24 exceeds less than table in effect shall be 25 _______________________________________________________________ 26 —— 0.50 A 27 0.50 0.90 B 28 0.90 1.30 C 29 1.30 —— D 30 Sec. 6. Section 96.7, subsection 2, paragraph d, 31 subparagraph (2), subparagraph division (d), Code 2025, is 32 amended by striking the subparagraph division and inserting in 33 lieu thereof the following: 34 (d) Each employer qualified for an experience rating 35 -2- SF 607 (2) 91 je/js/mb 2/ 4

S.F. 607 shall be assigned a contribution rate for each rate year 1 that corresponds to the employer’s benefit ratio rank in the 2 contribution rate table effective for the rate year from the 3 following contribution rate tables. Each employer’s benefit 4 ratio rank shall be computed by listing all the employers by 5 increasing benefit ratios, from the lowest benefit ratio to the 6 highest benefit ratio and grouping the employers so listed into 7 nine separate ranks containing as nearly as possible fourteen 8 and twenty-nine hundredths percent of the total taxable wages, 9 excluding reimbursable employment wages, in the first six 10 ranks, and four and seventy-six hundredths percent of the total 11 taxable wages, excluding reimbursable employment wages, in 12 ranks seven, eight, and nine, paid in covered employment during 13 the four completed calendar quarters immediately preceding the 14 computation date. If an employer’s taxable wages qualify the 15 employer for two separate benefit ratio ranks, the employer 16 shall be afforded the benefit ratio rank assigned the lower 17 contribution rate. Employers with identical benefit ratios 18 shall be assigned to the same benefit ratio rank. 19 Approximate Contribution Rate Tables 20 Benefit Cumulative 21 Ratio Taxable 22 Rank Payroll Limit A B C D 23 __________________________________________________________ 24 1 14.29% 0.00 0.00 0.00 0.00 25 2 28.58% 0.40 0.30 0.10 0.10 26 3 42.87% 1.20 0.80 0.40 0.20 27 4 57.16% 2.10 1.40 0.60 0.30 28 5 71.45% 3.60 2.40 1.10 0.50 29 6 85.74% 5.40 4.10 1.90 0.90 30 7 90.50% 5.40 5.40 4.20 2.00 31 8 95.26% 5.40 5.40 5.40 2.80 32 9 100.00% 5.40 5.40 5.40 5.40 33 Sec. 7. EMPLOYER SAVINGS. Any savings an employer receives 34 as a result of this Act should be used for at least one of the 35 -3- SF 607 (2) 91 je/js/mb 3/ 4

S.F. 607 following purposes: 1 1. To pay for employee salaries or benefits. 2 2. To use as an alternative to unemployment benefits during 3 periods of seasonal unemployment. 4 -4- SF 607 (2) 91 je/js/mb 4/ 4