BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1211|
|Office of Senate Floor Analyses | |
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CONSENT
Bill No: SB 1211
Author: Romero (D), Dutton (R), et al
Amended: 4/8/10
Vote: 21
SENATE LAB. & INDUS. RELATIONS COMMITTEE : 6-0, 4/19/10
AYES: DeSaulnier, Wyland, Ducheny, Hollingsworth, Leno,
Yee
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Unemployment insurance: elected officials
SOURCE : Author
DIGEST : This bill requires the Director of the
Employment Development Department to recover overpayments
of unemployment compensation benefits, unlawfully received
by an elected official.
ANALYSIS : Existing law establishes the Unemployment
Insurance (UI) program administered by the Employment
Development Department (EDD). The UI program is a
federal-state program that provides weekly unemployment
insurance payments to eligible workers who lose their jobs
through no fault of their own. The UI program is financed
by employers who pay unemployment taxes on the first $7,000
to wages paid to each employee in a calendar year.
Under existing law, any "employment" is defined for
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purposes of funding and establishing eligibility under the
UI program. With respect to certain public entities, the
definition of "employment" exempts service performed by an
individual in the exercise of his/her duties as:
1. An elected official.
2. An election official or election worker, if not expected
to earn at least $1,000 in a calendar year.
3. A member of a legislative body or the judiciary of a
state.
4. A member of the State National Guard or Air National
Guard.
5. An employee hired on a temporary basis in case of fire,
storm, snow, earthquake, flood, or other similar
emergency.
6. An official in a major nontenured policymaking or
advisory position.
7. A policymaker or in an advisory position whose duties do
not require more than eight hours per week, as
specified, among others.
Under existing law, any person who receives an overpayment
of unemployment compensation benefits is liable for the
amount overpaid, unless a specified criterion applies.
Existing law also allows the Director of EDD to take
specified steps to recover overpayment of unemployment
compensation benefits, including civil action against the
liable person within one year after certain actions have
been taken. EDD is required to send out a notice of
overpayment to a UI claimant who received benefits that
he/she was not eligible to receive. The notice of
overpayments shows the amount of the overpayment and
penalties, if any, explains why the claimant was overpaid
and provides information on appeal rights.
Existing law also permits the Director of EDD to initiate
summary judgment proceedings against a liable person to
recover overpayment of unemployment compensation benefits
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due to fraud, misrepresentation, or willful nondisclosure
on the part of the recipient. EDD is authorized to deduct
the money owed from future weekly unemployment or state
insurance benefits, reduce or totally withhold state income
tax refunds, lottery winnings, or any other money owed by
the state. And lastly, existing law also permits the
Director of EDD to file a claim against the claimant in
court, charge court costs, and interest, and record a lien
on the claimant's property.
This bill requires the Director of EDD to find that an
individual that has been overpaid unemployment insurance
benefits if the individual was an elected official and
his/her UI Claim was based solely on income solely derived
from his/her employment as an elected official.
Specifically, this bill:
1. Deems a UI claimant, who is found to have been overpaid
UI benefits based on his/her income as an elected
official, liable for the overpaid amount and ineligible
for any waiver of the amount due.
2. Authorizes the Director of EDD to initiate a civil
action against the claimant for the recovery of the
overpayment, within a specified time, and authorizes the
Director to initiate summary judgment proceedings
against such a person to recover the overpayment amount
due, including any penalties assessed on the claimant's
overdue amount.
3. Requires that EDD, not later than July 1, 2011, adopt
regulations to clarify that the Unemployment Insurance
Code excludes elected official from coverage under the
unemployment compensation system for purposes of benefit
eligibility.
4. Requires that EDD revise current language in the
California Employment Guide to state that an elected
official is not eligible to collect UI benefits based on
income earned from his/her service as an elected
official.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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SUPPORT : (Verified 5/4/10)
California Nurses Association
California Special Districts Association
City of Rosemead
ARGUMENTS IN SUPPORT : According to the author's office,
the duties of an elected official are to serve the public
and prudently manage the public's resources. The author's
office believes this bill is necessary to ensure that
elected officials at all levels of government in California
are not eligible to receive unemployment benefits in
relation to their service in public office. Furthermore,
proponents argue that elected officials have been placed in
office through the will of the voters and should not be
entitled to any unemployment related benefits should they
be removed from office either by voters or due to term
limits.
Proponents argue that as California struggles toward
economic recovery and millions remain unemployed, we need
to be certain that the limited resources of unemployment
insurance benefits will be held in reserve for the
displaced workers who truly need them. The author's office
believes this bill empowers EDD to automatically take
action to recover future unemployment payments if they were
incorrectly paid to elected official. Lastly, the author's
office believes this bill is entirely consistent with the
spirit and the letter of the law, and is geared toward
preventing both inadvertent mistakes and deliberate abuse
of the system set up solely for the protection of
California's workers.
PQ:do 5/5/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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