BILL ANALYSIS
SB 1211
Page 1
Date of Hearing: June 23, 2010
ASSEMBLY COMMITTEE ON INSURANCE
Jose Solorio, Chair
SB 1211 (Romero and Dutton) - As Amended: June 14, 2010
SENATE VOTE : 30-0
SUBJECT : Unemployment insurance benefits: overpayments and
elected officials
SUMMARY : Authorizes the Employment Development Department
(EDD) to recover overpayments of unemployment insurance (UI)
benefits unlawfully paid to elected officials. Specifically,
this bill :
1)Clarifies that an elected official is not eligible for
unemployment benefits based on income earned from his or her
service as an elected official, and UI benefits paid based on
that service shall constitute an overpayment of UI benefits.
2)Requires the EDD to adopt regulations to clarify that existing
law excludes elected officials from coverage under the UI
compensation system for purposes of benefit eligibility.
3)Authorizes the EDD Director to file a civil action against a
liable elected official within three years of the
administrative determination of an overpayment of UI benefits.
4)Authorizes the EDD Director to initiate proceedings for a
summary judgment against a liable elected official within
three years of the administrative determination of an
overpayment of UI benefits.
EXISTING LAW :
1)Defines "employment" for purposes of establishing eligibility
for the UI Program and excludes services performed by an
individual in the exercise of his or her duties as an elected
official, or a member of a legislative body or the judiciary,
and in other specified positions.
2)Authorizes the Director of the Employment Development
Department (EDD) to file a civil action and to initiate
SB 1211
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proceedings for a summary judgment against the liable person
to recover an overpayment of UI benefits.
3)Specifies that the EDD Director has one year from the date of
the administrative determination of an UI overpayment to file
the civil action, unless the individual has been overpaid UI
benefits due to fraud, misrepresentation, or nondisclosure, in
which case the EDD Director has three years to file the civil
action.
FISCAL EFFECT : Undetermined.
COMMENTS :
1)Purpose. The purpose of this bill is authorize the Director
of EDD to recover overpayments of UI benefits paid to elected
officials.
2)Background. Existing law defines "employment" for purposes of
establishing eligibility for the UI Program. Existing law
excludes from the definition of eligible "employment" those
services performed by an individual in the exercise of his or
her duties as an elected official, or a member of a
legislative body or the judiciary, and in other specified
positions. (See Section 634.5 of the Unemployment Insurance
Code.)
3)Argument 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 states
this bill is necessary to ensure that elected officials in
California are not eligible to receive UI benefits for their
service in public office. Also, proponents argue that elected
officials have been placed in office through the will of the
voters and should not be entitled to any unemployment
insurance benefits should they be removed from office either
by the voters or due to term limits.
Proponents argue that as California struggles toward economic
recovery and millions remain unemployed, it is vital that the
limited resources of the Unemployment Fund be reserved for
displaced workers who truly need the UI benefits. This bill
is intended to empower EDD to automatically take action to
recover future UI payments if they are incorrectly paid to
elected officials. The author believes this bill is
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consistent with the spirit and the letter of the law, and is
geared toward preventing both inadvertent mistakes and
deliberate abuse of the system established solely for the
protection of California workers.
4)Technical change recommended. The bill will require EDD to
revise the current language in the California Employer's Guide
to state that an elected official is not eligible to collect
"unemployment benefits" based on income earned from his or her
service as an elected official. Since this bill is directed
at prohibiting elected officials from collecting unemployment
insurance benefits, it is recommended that the bill be amended
accordingly. On page 4 of the bill, line 30, after
"unemployment" add the word "insurance".
REGISTERED SUPPORT / OPPOSITION :
Support
California Special Districts Association
City of Rosemead
Opposition
None received.
Analysis Prepared by : Manny Hernandez / INS. / (916) 319-2086