It is enacted by the General Assembly as follows:

SECTION 1. Section 28-40-1 of the General Laws in Chapter 28-40 entitled "Temporary Disability Insurance -- Contributions" is hereby amended to read as follows:

{ADD 28-40-1. Amount of employee contributions -- Wages on which based. -- ADD} {DEL (a) Beginning January 1, 1987, each employee shall contribute with respect to employment after the date upon which the employer becomes subject to chapters 39 -- 41, inclusive, of this title an amount equal to one percent (1.0%) of the wages paid by the employer up to the taxable wage base as defined and computed in subsection (b) of this section. DEL}

{DEL (b) DEL} {ADD (a) ADD} The taxable wage base under this chapter for the calendar year beginning January 1, {DEL 1990 DEL} {ADD 1995 ADD} and all calendar years thereafter shall be equal to {ADD the greater of $38,000 or ADD} the annual earnings needed by an individual to qualify for the maximum weekly benefit amount and the maximum duration under the Rhode Island temporary disability insurance act. That taxable wage base shall be computed as follows:

On September 30, {DEL 1989 DEL} {ADD 1994 ADD} and every September 30 thereafter the maximum weekly benefit amount in effect as of that date shall be multiplied by thirty (30) and the resultant product shall be divided by thirty-six hundredths (.36). If the result thus obtained is not an even multiple of one hundred dollars ($100), it shall be rounded upward to the next higher even multiple of one hundred dollars ($100). That taxable wage base shall be effective for the calendar year beginning on the next January 1.

{DEL (c) Notwithstanding any other provisions of this section to the contrary, beginning July 1, 1991, each employee shall contribute with respect to employment after the date upon which the employer becomes subject to chapters 39 to 41, inclusive, of this title, an amount equal to one and two-tenths percent (1.3%) of the wages paid by the employer from July 1, 1991 to December 31, 1991, up to a taxable wage base of twenty-five thousand three hundred dollars ($12,650). DEL}

{DEL (d) DEL} {ADD (b) ADD} Beginning January 1, 1992, each employee shall contribute with respect to employment after the date upon which the employer becomes subject to chapters 39 -- 41, inclusive, of this title, an amount equal to one and three-tenths percent (1.3%) of the wages paid by the employer up to a taxable wage base of $38,000.

{ADD (c) Beginning January 1, 1995 and all calendar years thereafter, each employee shall contribute with respect to employment after the date upon which the employer becomes subject to chapters 39--41, inclusive, of this title an amount equal to the fund cost rate times the wages paid by the employer to the employee up to the taxable wage base as defined and computed in subsection (a) of this section. The employee contribution rate for the following calendar year shall be determined by computing the fund cost rate on or before November 15 of each year as follows:

The total amount of disbursements made from the fund for the twelve (12) month period ending on the immediately preceding September 30 shall be divided by the total taxable wages paid by employers during the twelve (12) month period ending on the immediately preceding June 30. The ratio thus obtained shall be multiplied by one hundred (100) and the resultant product if not an exact multiple of one-tenth of one percent (0.1%) shall be rounded down to the next lowest multiple of one-tenth of one percent (0.1%); Provided, however, that if the fund balance as of the preceding September 30 is less than the total disbursements from the fund for the six (6) month period ending on that September 30, that difference shall be added to the total disbursements for the twelve (12) month period ending September 30 for the purpose of computing the fund cost rate, and if the resulting fund cost rate is not an exact multiple of one-tenth of one percent (0.1%) it shall be rounded to the nearest multiple of one-tenth of one percent (0.1%). ADD}

{DEL (c) The director shall establish a formula, subject to approval by the general assembly, for determining the annual employee contribution rate to take effect for the tax year beginning January 1, 1993 and all tax years thereafter. DEL}

SECTION 2. This act shall take effect upon passage.