Unemployment extension approved

Unemployed Minnesotans would be eligible for a 13-week extension to their unemployment benefits under a bill that won committee approval Jan. 25.

Sponsored by Rep. Rich Murray (R-Albert Lea), HF103 would also remove restrictions on the amount of benefits that can be paid to adult children who work for their parents’ businesses.

Members of the House Jobs and Economic Development Finance Committee referred the bill to the House Taxes Committee. It’s Senate companion is SF114 sponsored by Sen. John Pederson (R-St. Cloud).

The bill would give Minnesotans access to a federal extension of unemployment insurance benefits recently passed by Congress and signed by President Obama. Qualifying Minnesotans would be eligible for a maximum of 86 weeks of benefits, under the change.

Murray said the extension is funded completely by the federal government and would not cost the state’s UI trust fund, which is currently $600 million in deficit. He said the new federal extensions could bring $160 million into the state’s economy.

Some committee members raised concerns about the provision to allow Minnesotans to collect full unemployment benefits when they are laid off from their parents’ businesses. The bill would essentially repeal a law that was enacted last year to provide no more than five weeks of benefits to these individuals.

Craig Gustafson, the state’s chief UI law judge, said last year’s change was intended to prevent employers from “gaming the system” by hiring their own children for seasonal work and then laying them off so they can collect unemployment. He said the practice creates a $100 million subsidy that benefits certain small businesses, such as summer resorts, at the expense of others.

Rep. Bev Scalze (DFL-Little Canada), a small-business owner, argued the provision would “subsidize bad behavior.”