BILL ANALYSIS �
AB 2689
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Date of Hearing: April 2, 2014
ASSEMBLY COMMITTEE ON INSURANCE
Henry T. Perea, Chair
AB 2689 (Quirk-Silva) - As Introduced: February 21, 2014
SUBJECT : Sharing Unemployment Insurance Data
SUMMARY : Requires the Employment Development Department (EDD)
to provide unemployment insurance (UI) information it gathers to
the Department of Justice (DOJ) to combat identity theft.
Specifically, this bill :
1)Requires EDD to annually search the UI wage data to identify
instances where more than one name is associated with a single
social security number (SSN).
2)Requires EDD to contact and forward information to DOJ when
EDD discovers three or more names are associated with a single
SSN.
EXISTING LAW :
1)Prohibits generally, as a matter of federal and state law, the
disclosure of confidential UI program information for non-UI
program purposes.
2)Establishes, as a matter of federal law, a number of
exceptions to the prohibition on sharing confidential UI
program information for non-UI program purposes, including
disclosure to a public official if:
a) The information is used by a public official in the
course of his or her official duties.
b) Disclosing the information does not interfere with
the efficient administration of the UI program.
c) There is a state law authorizing the disclosure.
d) The requesting agency reimburses EDD for the cost of
providing the information.
e) There is a written agreement with the agency
receiving the information governing the use and
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protection of the information.
3)Permits the disclosure and use of confidential UI program
information for wide range of non-UI purposes consistent with
federal regulations.
FISCAL EFFECT : Undetermined
COMMENTS :
1)Purpose . According to the author, a recent review of EDD by
the State Auditor found that it was common for multiple names
to be associated with a single Social Security number in an
EDD database, and that this is an indication of potential
identity theft. Unfortunately, the department does not
provide this information to law enforcement when it suspects
misuse of Social Security numbers. Because EDD does not have
the authority to share this information with appropriate law
enforcement officials when evidence suggests the misuse of
Social Security numbers, AB 2689 would provide the department
this authority to share crucial information.
2)Auditor Recommendation . In October 2013, the State Auditor
released an audit of veterans' employment services at EDD.
The report included the following recommendation:
"To help protect the State's citizens from identity theft, the
Legislature should expressly authorize the department, on its
own initiative, to share information from the Base Wage File
with appropriate law enforcement officials when evidence
exists of the potential misuse of Social Security numbers. If
the department receives such legal authority, it should, at
least annually, review the Base Wage File for associations of
multiple names with a single Social Security number. The
department should also establish a reasonable threshold for
the number of associated names that will trigger further
scrutiny from the department or referral to law enforcement."
3)EDD Response . EDD included the following in its letter
responding to the audit recommendation:
"The EDD gathers and maintains information in the Base Wage
File (BWF), which is the repository for the wage data
submitted to EDD by employers for use in the administration of
the Unemployment Insurance (UI) Program. The wage data are
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comprised of the Social Security Numbers (SSN) and names,
which employers receive from their employees, and the
quarterly earnings attributed to those SSNs.
The BWF currently contains information from 1.3 million
employers who reported over 22 million wage lines. The audit
identified more than 1,400 instances where a single SSN was
associated with 10 or more different names in a single
quarter. These instances represent a statistically
insignificant potential discrepancy rate of 0.006364 percent."
4)Federal Regulations . UI operates under a combination of state
and federal rules. The federal rules establish minimum
standards and requirements that all states must follow. As
noted above, federal regulations that govern the sharing of
confidential UI program information prohibit disclosure for
non-UI program purposes unless a number of specific
requirements are met. The bill currently requires EDD and the
Department of Justice to violate federal regulations on a
routine basis and subject the state to potential federal
sanctions for those violations.
5)Related Legislation . Two other bills have been introduced in
the Assembly (AB 1631 (Chavez) and AB 1663 (Hagman) and one
has been introduced in the Senate (SB 1435 (Nielsen)) that are
nearly identical to AB 2689.
REGISTERED SUPPORT / OPPOSITION :
Support
None received
Opposition
None received
Analysis Prepared by : Paul Riches / INS. / (916) 319-2086