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Committee hears AB21 to remove volatile solvency formula and extend spending window for workforce fund
Summary
Chief economist David Schmidt told the committee AB21 would delete a long‑standing, volatile trust‑fund formula and extend the period for obligating Career Enhancement Program funds from 90 to 180 days to allow better planning and spending of workforce dollars.
Carson City — The Assembly Committee on Commerce and Labor heard testimony Feb. 20 on Assembly Bill 21, which would revise two parts of Nevada’s unemployment compensation law: remove a formula used for measuring trust‑fund solvency and extend the time DETR has to obligate Career Enhancement Program (CEP) funds before those funds revert to the UI trust fund.
David Schmidt, chief economist for DETR’s Research and Analysis Bureau, told the committee the formula currently codified in statute (described in testimony as a 10‑year retrospective multiplicative calculation) is “very volatile” and tends to understate funding needs before recessions and overstate them after recessions. Schmidt said the formula’s recommended fund targets produced an implausible $8.2 billion figure in recent calculations and that the agency already uses an alternative federal metric — the Average High‑Cost Multiple (AHCM) — for planning and recommendations.
Section 2 of AB21 addresses the Unemployment Compensation Administration Fund and the state Career Enhancement Program. Schmidt explained that employers pay a 0.05% assessment on taxable wages; because employers file quarterly and wage caps create seasonality, a large share of collections arrives in one quarter. Under current law any un‑obligated balance must revert to the UI trust fund 90 days after the fiscal year begins; Schmidt said that 90‑day window can create a procurement and contracting “race” to obligate money and that increasing the period to 180 days would give staff more time to plan and obligate funds thoughtfully.
Support testimony included Andrew McKay (Nevada Franchise Auto Dealers Association), who told the committee the measure brings “common sense to long term planning” and reduces volatility in employer costs. No callers registered formal opposition during the broadcasted portion of the hearing. Schmidt offered to provide committee members a demonstration of the NUI benefits system when it becomes available in the summer.
No formal committee action was recorded at the conclusion of the hearing.
