BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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                              UNFINISHED BUSINESS


          Bill No:  SB 1211
          Author:   Romero (D), Dutton (R), et al
          Amended:  6/29/10 in Assembly
          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

           ASSEMBLY FLOOR  :  78-0, 8/12/10 (Consent) - See last page  
            for vote


           SUBJECT  :    Unemployment insurance:  elected officials

           SOURCE  :     Author


           DIGEST  :    This bill requires the Employment Development  
          Department (EDD) to determine an individual has been  
          overpaid unemployment insurance (UI) benefits if those  
          benefits are based on employment income from serving as an  
          elected official.  This bill authorizes EDD to file a  
          related civil action for recovery of UI benefit  
          overpayments and requires EDD to adopt related regulations  
          by July 1, 2011.

           Assembly Amendments  make clarifying and technical changes.

           ANALYSIS  :    Existing law establishes the Unemployment  
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          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  
          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  







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          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  
          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:

          1. Requires EDD to determine an individual has been  
             overpaid UI benefits if those benefits are based on  
             employment income from serving as an elected official.

          2. Authorizes EDD to file a related civil action for  
             recovery of UI benefit overpayments and requires EDD to  
             adopt related regulations by July 1, 2011.

           FISCAL EFFECT :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  6/17/10) (unable to reverify)

          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  







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          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.


           ASSEMBLY FLOOR  : 
          AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall, Bill  
            Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,  
            Bradford, Brownley, Buchanan, Caballero, Charles  
            Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De  
            La Torre, De Leon, DeVore, Eng, Evans, Feuer, Fletcher,  
            Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani,  
            Garrick, Gatto, Gilmore, Hagman, Hall, Harkey, Hayashi,  
            Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight,  
            Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza, Miller,  
            Monning, Nava, Nestande, Niello, Nielsen, V. Manuel  
            Perez, Portantino, Ruskin, Salas, Saldana, Silva,  
            Skinner, Smyth, Solorio, Audra Strickland, Swanson,  
            Torlakson, Torres, Torrico, Tran, Villines, Yamada, John  
            A. Perez
          NO VOTE RECORDED: Norby, Vacancy


          PQ:do  8/17/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE








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