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AB-548 Unemployment compensation benefits: overpayments.(2021-2022)

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Date Published: 04/22/2021 09:00 PM
AB548:v97#DOCUMENT

Amended  IN  Assembly  April 22, 2021
Amended  IN  Assembly  March 18, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 548


Introduced by Assembly Member Carrillo

February 10, 2021


An act to amend Sections 1375.1, 1376, 1379, and 1379.6 of, and to add Sections 1379.1 1379.1, 1379.3, and 1385 to, and to repeal Section 1375.1 of, the Unemployment Insurance Code, relating to unemployment compensation.


LEGISLATIVE COUNSEL'S DIGEST


AB 548, as amended, Carrillo. Unemployment compensation benefits: overpayments.
Under existing law, except as specified, any person who receives an overpayment of unemployment compensation benefits is liable for the amount overpaid. Exceptions to liability include if the overpayment was not due to fraud, misrepresentation, or willful nondisclosure on the part of the recipient, the overpayment was received without fault on the part of the recipient, and its recovery would be against equity and good conscience. Under existing law, if the Director of Employment Development finds that an individual has been overpaid unemployment compensation benefits because the individual, for the purpose of obtaining those benefits, either made a false statement or representation with actual knowledge of the falsity or withheld a material fact, then the director is required to assess against the individual an amount equal to 30% of the overpayment amount. Existing law requires 50% of the overpayment assessment amount to be deposited into the Unemployment Trust Fund and 50% into the Employment Development Department Benefit Audit Fund, both of which are continuously appropriated funds, and requires that all interest collected is deposited into the Employment Development Department Benefit Audit Fund. Existing law authorizes the director to take specified steps to recover overpayment of unemployment compensation benefits including, among others, initiating proceedings for a summary judgment against the liable person if the director finds that overpayment may not be waived due to specified circumstances. Existing law authorizes the director, not later than 3 years after the overpayment became final, to file with the clerk of the proper court in the county from which the overpayment of benefits was paid or in the county in which the claimant resides, a certificate containing specified provisions, including a statement of the amount due, including any assessment, plus interest from the date that the initial determination of overpayment was made. Existing law also authorizes the director to offset the amount of the overpayment received by the liable person against any amount of benefits to which the person becomes entitled within 6 years of notice of overpayment determination.
This bill would delete modify the 30% penalty assessment and to be a one-time penalty, to the extent required by federal law. The bill, with regard to the director’s findings regarding overpayment, would additionally require the director to find that a false statement or representation, or the withholding of a material fact, was made with fraudulent intent. The bill would make conforming changes. changes relating to the one-time penalty. The bill, with regard to summary judgment proceedings, would delete the authorization for interest on the amount of overpayment. The bill would authorize interest to be charged and collected on overpayments, to be calculated at a specified rate, if an individual has been charged an overpayment penalty for Pandemic Unemployment Assistance benefits. The bill would require revenues of that interest to be deposited 50% into the Unemployment Trust Fund and 50% into the Employment Development Department Benefit Audit Fund. Under the bill, the moneys in those funds attributable to those revenues would not be continuously appropriated and would only be available for expenditure upon appropriation by the Legislature. The bill would limit offsets as prescribed. The bill would require the director, to the extent authorized by applicable federal law, to waive any overpayment for which the director determines the person to whom the overpayment was made is not at fault. The bill would require the director to seek waivers of federal law for any overpayment recovery required by federal law for overpayment for which the director determines the person to whom the overpayment was made is not at fault.
The bill would prohibit the director from commencing recovery of overpayments of unemployment compensation benefits until the latest of the following dates: March 1, 2022; the end termination of the declared COVID-19 state of emergency on COVID-19; or the date on which the liable person is first reemployed after receiving overpayment. emergency, as prescribed.
The bill would require the Employment Development Department, commencing July 1, 2022, to post on its internet website prescribed information on overpayment and repayment for benefit payments for the period from March 1, 2020, to the date the department resumes eligibility determinations, until the repayment period for all overpayment notices to be included in the posted information has elapsed.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.Section 1375.1 of the Unemployment Insurance Code is repealed.

SECTION 1.

 Section 1375.1 of the Unemployment Insurance Code is amended to read:

1375.1.
 If the director finds that an individual has been overpaid unemployment compensation benefits because he or she willfully, that individual, willfully, and with fraudulent intent, for the purpose of obtaining unemployment compensation benefits, either made a false statement or representation, with actual knowledge of the falsity thereof, or withheld a material fact, the director shall assess a one-time penalty, to the extent required by federal law, against the individual an amount equal to 30 percent of the overpayment amount. Assessments collected under this section shall be deposited in the following manner:
(a) For penalty assessments established prior to October 22, 2013, 100 percent of the overpayment penalty amount in the Benefit Audit Fund.
(b) For penalty assessments established on or after October 22, 2013, as follows:
(1) 50 percent of the overpayment penalty amount in the Unemployment Trust Fund.
(2) 50 percent of the overpayment penalty amount in the Employment Development Department Benefit Audit Fund.

SEC. 2.

 Section 1376 of the Unemployment Insurance Code is amended to read:

1376.
 The Director of Employment Development shall determine the amount of the overpayment and any one-time penalty authorized under Section 1375.1 and shall notify the liable person of the basis of the overpayment determination. In the absence of fraud, misrepresentation, or willful nondisclosure, notice of the overpayment determination shall be mailed or personally served within the latest of the following periods:
(a) Not later than one year after the close of the benefit year in which the overpayment was made.
(b) Not later than six months after the date a backpay award was made.

SEC. 3.

 Section 1379 of the Unemployment Insurance Code is amended to read:

1379.
 The director, subject to this article, may do any or all of the following in the recovery of overpayments of unemployment compensation benefits:
(a) File a civil action against the liable person for the recovery of the amount of the overpayment within one year after any of the following, or, in cases where the individual has been overpaid benefits due to fraud, misrepresentation, or nondisclosure, or where the director has found an overpayment pursuant to Section 1375.7, within three years of any of the following:
(1) The mailing or personal service of the notice of overpayment determination if the person affected does not file an appeal to an administrative law judge.
(2) The mailing of the decision of the administrative law judge if the person affected does not initiate a further appeal to the appeals board.
(3) The date of the decision of the appeals board.
(b) Initiate proceedings for a summary judgment against the liable person. However, this subdivision applies only where the director has found, pursuant to Section 1375, that the overpayment may not be waived because it was due to fraud, misrepresentation, or willful nondisclosure on the part of the recipient or where the director has found an overpayment pursuant to Section 1375.7. The director may, not later than three years after the overpayment became final, file with the clerk of the proper court in the county from which the overpayment of benefits was paid or in the county in which the claimant resides, a certificate containing all of the following:
(1) The amount due. due, including the amount of the one-time penalty under Section 1375.1.
(2) A statement that the director has complied with all the provisions of this article prior to the filing of the certificate.
(3) A request that judgment be entered against the liable person in the amount set forth in the certificate.
The clerk, immediately upon the filing of the certificate, shall enter a judgment for the State of California against the liable person in the amount set forth in the certificate.
For the purposes of this subdivision only, an overpayment is final and due and payable after any of the following:
(A) The liable person has not filed an appeal pursuant to Section 1377.
(B) The liable person has filed an appeal to the administrative law judge and a decision of an administrative law judge has become final.
(C) The liable person has filed an appeal to the appeals board and the decision of the appeals board has become final because the liable person has not sought judicial review within the six-month period provided by Section 410.
(c) Reduce or vacate a summary judgment by filing a certificate to that effect with the clerk of the proper court.
(d) Offset the amount of the overpayment received by the liable person against any amount of benefits to which the liable person may become entitled under this division within six years of the date of the mailing or personal service of the notice of overpayment determination. The offsets under this subdivision shall be limited to 10 percent of the weekly benefits for claimants whose weekly benefits are less than three hundred dollars ($300) and to 25 percent for claimants whose weekly benefits equal or exceed three hundred dollars ($300).
(e) The director, to the extent authorized by applicable federal law, shall waive any overpayment for which the director determines the person to whom the overpayment was made is not at fault. The director shall seek waivers of federal law for any overpayment recovery required by federal law for overpayment for which the director determines the person to whom the overpayment was made is not at fault.

SEC. 4.

 Section 1379.1 is added to the Unemployment Insurance Code, to read:

1379.1.
 (a) Notwithstanding Section 1379, the director shall not commence recovery of overpayments of unemployment compensation benefits received after March 1, 2020, until the latest of the following dates: March 1, 2022; the end of 60 days after the declared COVID-19 state of emergency on COVID-19; or the date on which the liable person is first reemployed after receiving overpayment. is terminated by the Governor or Legislature pursuant to Section 8629 of the Government Code.
(b) This section shall not apply to overpayments for which a penalty may be charged under Section 1375.1.

SEC. 5.

 Section 1379.3 is added to the Unemployment Insurance Code, to read:

1379.3.
 (a) Interest may only be charged and collected under this article if an individual has been charged a penalty under Section 1375.1 for overpayment of Pandemic Unemployment Assistance benefits. Interest shall be calculated at the adjusted annual rate, or fraction thereof, established pursuant to Section 19521 of the Revenue and Taxation Code.
(b) Revenues of the interest shall be deposited in accordance with subdivision (b) of Section 1375.1. Notwithstanding any other law, the money in the Unemployment Trust Fund and the Employment Development Department Benefit Audit Fund that is attributable to revenues of the interest pursuant to this section shall not be continuously appropriated. The money in each fund that is not continuously appropriated shall be available for expenditure as provided in this part only upon appropriation by the Legislature.

SEC. 5.SEC. 6.

 Section 1379.6 of the Unemployment Insurance Code is amended to read:

1379.6.
 (a) If an abstract has been recorded as provided in Section 1379.5, and the lien has been satisfied in full, the department, pursuant to Section 724.050 of the Code of Civil Procedure, shall do all of the following:
(1) File an acknowledgment of satisfaction of judgment with the court.
(2) Serve an acknowledgment of satisfaction of judgment on the claimant. Service shall be made personally or by mail.
(3) Record an acknowledgment of satisfaction of judgment in the office of the county recorder where the abstract of judgment is recorded.
(b) If an acknowledgment of satisfaction of judgment is recorded, the cost of recording is an obligation of the claimant and may be collected from the claimant in any manner provided by law for the collection of benefit overpayments.
(c) If payment is made by check, any action specified in subdivision (a) shall not be required until the check has been paid by the financial institution upon which it was drawn.

SEC. 6.SEC. 7.

 Section 1385 is added to the Unemployment Insurance Code, to read:

1385.
 (a) Commencing July 1, 2022, and at least every six months thereafter, subject to subdivision (b), the department shall post on its internet website, for benefit payments for the period from March 1, 2020, to the date the department resumes eligibility determinations, inclusive, the following information:
(1) The total amount of benefit payments for which it must assess potential overpayments.
(2) The total amount for which it has issued overpayment notices.
(3) The total amount for which it has waived overpayment.
(4) The total amount repaid related to overpayment notices.
(b) The department shall comply with subdivision (a) until the repayment period for all overpayment notices to be included in the posted information has elapsed.