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Minn. House OKs unemployment insurance rate cut

ST. PAUL, Minn. (AP) -- Minnesota companies are in for a break in their state unemployment insurance tax rates.

A budget bill approved Wednesday in the House would temporarily chop the rates to produce savings to businesses of $346 million over the next two years.

The tax is based on the wages paid at for-profit companies. The bill, which the Senate is poised to pass Thursday, also cuts an additional assessment on businesses.

The cuts are happening because the unemployment insurance trust fund is brimming. The fund's financial health has improved as the economy has rebounded. If the fund balance deteriorates, the full rate cut would not happen.

The rate cuts have no bearing on the general state budget because the unemployment insurance fund is maintained outside the main treasury.