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UNOFFICIAL COPY 26 RS SB 129/GA
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SB012910.100 - 1779 - XXXX 2/24/2026 3:04 PM GA
AN ACT relating to unemployment insurance. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 341.243 is amended to read as follows: 3
(1) There is created within the State Treasury a special fund known as the service 4
capacity upgrade fund that shall be administered separate and apart from all public 5
money or funds of the state. 6
(2) The service capacity upgrade fund shall be used solely for acquisition and 7
upgrading of the technology base, program integrity functions, and service delivery 8
capacity in support of the programs administered by the Office of Unemployment 9
Insurance. The secretary shall have full power, authority, and jurisdiction over the 10
fund, including all money, property, and securities belonging thereto, and shall 11
perform any act necessary or convenient in the administration of the fund consistent 12
with this section. Any expenditure of the fund to upgrade the technology base shall 13
be coordinated with and approved by the Commonwealth Office of Technology, 14
and nothing in this section shall be construed as reducing or limiting the authority 15
of the Commonwealth's chief information officer over all technology expenditures. 16
The secretary shall provide an annual report to the Interim Joint Committee on 17
Economic Development and Workforce Investment detailing all receipts and 18
expenditures of the fund. 19
(3) Any money collected under the provisions of this section shall be invested at 20
interest in banks or other interest -bearing obligations of the United States. 21
Investments shall at all times be made so that all the assets of the service capacity 22
upgrade fund shall be convertible into cash when needed for the payment of 23
expenses incurred in upgrading the service capacity of the Office of Unemployment 24
Insurance. All interest income received under this section shall be credited to the 25
fund. The State Treasurer shall dispose of secur ities or other property belonging to 26
the fund only under the direction of the secretary and the secretary of the Finance 27
UNOFFICIAL COPY 26 RS SB 129/GA
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SB012910.100 - 1779 - XXXX 2/24/2026 3:04 PM GA
and Administration Cabinet. 1
(4) From[Beginning] October 1, 2018, to December 31, 2026, all rates otherwise 2
established under KRS 341.27 0 and 341.272 shall be adjusted by subtracting 3
seventy-five thousandths percent (0.075%) from each rate, but only if the 4
unemployment insurance trust fund balance exceeds the balance of the trust fund as 5
of December 31, 2017. 6
(5) (a) Beginning January 1, 2027, all rates otherwise established under KRS 7
341.270 and 341.272 shall be adjusted by subtracting one hundred fifteen 8
ten-thousandths percent (0.0115%) from each rate; 9
(b) The secretary shall annually set the adjustment percentage t o be effective 10
January 1 of the subsequent year, not to exceed twenty -five thousandths 11
percent (0.025%). 12
(c) The secretary shall suspend the subtraction from each rate as prescribed in 13
this subsection at any time: 14
1. The service capacity upgrade fund balan ce is fifteen million dollars 15
($15,000,000) or more; or 16
2. The unemployment insurance trust fund does not exceed the balance 17
of the trust fund as of December 31, 2022. 18
(6)[(5)] For any calendar year in which all rates have been reduced in accordance with 19
subsection (4) or (5) of this section, all contributory employers shall pay into the 20
service capacity upgrade fund an amount equal to the percentage by which rates 21
were reduced multiplied by their taxable wages paid during that calendar year. 22
Payments shall be made at the same time and in the same manner as prescribed for 23
payment of contributions under KRS 341.260 and all regulations prescribed by the 24
secretary in support of that section. The restrictions in KRS 341.470(1) apply 25
equally to the provisions of this section. Failure to make these payments shall be 26
subject to interest and all other collection actions provided for failure to make 27
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SB012910.100 - 1779 - XXXX 2/24/2026 3:04 PM GA
contributions under KRS 341.300. 1
(7)[(6)] All payments required under subsection (6)[(5)] of this section, along with 2
any interest due to late payment of these assessments, shall be deposited in the 3
service capacity upgrade fund. 4
(8)[(7)] Notwithstanding subsection (4) or (5) of this section, the secretary may 5
exercise his or her discretion to reduce the percentage rate pre scribed in subsection 6
(4) or (5) of this section or suspend required payments to the service capacity 7
upgrade fund at any time.[ 8
(8) The secretary shall suspend the reduction of the rate prescribed in subsection (4) of 9
this section at any time when collect ions for the service capacity upgrade fund 10
exceed a cumulative amount of sixty million dollars ($60,000,000). At the time 11
payments are suspended, any funds thus far collected under subsection (4) of this 12
section in excess of those necessary to fund technology upgrades, shall be deposited 13
into the unemployment insurance trust fund. Any future collection of past due 14
payments to the service capacity upgrade fund, including any applicable penalty 15
and interest funds, shall be deposited into the penalty and interest fund.] 16