SSB 1020 (LSB 1383XC (2) 88)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON CHAPMAN)

A BILL FOR

An Act relating to the special employment security contingency fund and funding of an insurance fraud bureau special fund, and including effective date and retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 96.13, subsection 3, paragraph a, subparagraph (1), Code 2019, is amended to read as follows:
   (1)  There is created in the state treasury a special fund to be known as the special employment security contingency fund. All interest, fines, and penalties, regardless of when they become payable, collected from employers under section 96.14 shall be paid into the fund. The moneys in the fund shall not be expended or available for expenditure in any manner which would permit their substitution for federal funds which would in the absence of the moneys be available to finance expenditures for the administration of the department. However, the moneys may be used as a revolving fund to cover expenditures for which federal funds have been duly requested but not yet received, subject to the charging of the expenditures against the funds when received. The moneys may be used for the payment of costs of administration which are found not to have been properly and validly chargeable against federal grants or other funds, received for the department. The moneys in the fund are specifically made available to replace, within a reasonable time, any moneys received by this state in the form of grants from the federal government for administrative expenses which because of any action or contingency have been expended for purposes other than, or in excess of, those necessary for the proper administration of the department. All moneys in the fund shall be deposited, administered, and disbursed in the same manner and under the same conditions and requirements as are provided by law for other special funds in the state treasury. Interest earned upon moneys in the fund shall be deposited in and credited to the fund.
    Sec. 2.  NEW SECTION.  96.13A  Insurance fraud bureau special fund.
   1.  There is created in the state treasury a special fund to be known as the insurance fraud bureau special fund. All interest, fines, and penalties, regardless of when they become payable, collected by the department of workforce development from employers pursuant to section 96.14 shall be paid into the fund. Moneys in the fund are appropriated each fiscal year to the insurance division within the department of commerce to be used for the support and maintenance of the insurance fraud bureau created pursuant to section 507E.2. Moneys in the fund are deposited, administered, and disbursed in the same manner and under the same conditions and requirements as are provided by law for other special funds in the state treasury. Notwithstanding section 12C.7, subsection 2, interest earned on moneys in the fund shall be deposited in and credited to the fund.
   2.  The treasurer of state shall be the custodian of the fund and shall give a separate and additional bond conditioned upon the faithful performance of the treasurer’s duties in connection with the fund in an amount and with sureties as shall be fixed and approved by the governor. The premium for the bond shall be paid from the moneys in the fund. All sums recovered on the bond for losses sustained by the fund shall be deposited in the fund. Refunds of interest and penalties shall be paid only from the fund.
   3.  Notwithstanding section 8.33, moneys remaining in the fund at the end of each fiscal year shall not revert to any fund and shall remain in the fund.
    Sec. 3.  2017 Iowa Acts, chapter 169, section 27, subsection 2, as amended by 2018 Iowa Acts, chapter 1169, section 10, is amended by striking the subsection.
    Sec. 4.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to July 1, 2018.
    Sec. 5.  EFFECTIVE DATE.  This Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to the creation and funding of the insurance fraud bureau special fund and to the special employment security contingency fund.
   Currently, the law requires the department of workforce development (IWD) to collect and deposit into the special employment security contingency fund (special fund) all interest, fines, and penalties collected from employers due to their failure to comply with unemployment compensation fund contribution requirements. Some of the moneys in the special fund are allocated to the IWD, some are available to the IWD subject to restrictions, and some are available for use at the discretion of the IWD. 
   The bill still requires the IWD to collect the interest, fines, and penalties; however, the bill provides that the IWD is to deposit such moneys in a newly created insurance fraud bureau special fund. The bill further provides that all moneys deposited are appropriated each fiscal year to the insurance division to be used for the support and maintenance of the insurance fraud bureau. The bill also removes IWD’s authority for discretionary spending of moneys in the special fund for fiscal year 2018-2019.
   The bill applies retroactively to July 1, 2018. The bill takes effect upon enactment.