BILL ANALYSIS Ó AB 1753 Page 1 Date of Hearing: April 20, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 1753 (Obernolte) - As Amended March 30, 2016 ----------------------------------------------------------------- |Policy |Public Employees, |Vote:| 6 - 0 | |Committee: |Retirement/Soc Sec | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill: 1)Specifies that the date of an overpayment involving leave credits is the later of the following two dates: a) When the employee receives compensation in exchange for AB 1753 Page 2 erroneously credited leave. b) The date that the state discovers fraud, embezzlement, or falsification, if applicable. 1)Requires administrative action to recover overpayments to be initiated by providing written notice to the employee within three years of the date of overpayment. FISCAL EFFECT: Negligible state costs as the California Department of Human Resources (CalHR) already provides guidance to state agencies that reflects the provisions of this bill. COMMENTS: 1)Purpose and background: According to the author, this bill will help the state recover overpayments to state employees by clarifying when an overpayment actually occurs. This bill adopts recommendations from the California State Auditor on possible strategies to recover the overpayment of leave credits. These recommendations came from their 2014 report that found that as of the end of 2013, the value of erroneous leave hours was nearly $6.4 million. The State Auditor report argues that the state faces obstacles in recovering these overpayments because while state agencies are required to initiate collection efforts on overpayments within three years of an overpayment occurring, existing law does not explicitly define when an overpayment occurs. As a result, in the event of litigation a court may find that the state waited too long to recover overpayments. AB 1753 Page 3 Analysis Prepared by:Luke Reidenbach / APPR. / (916) 319-2081