House Study Bill 557 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED DEPARTMENT OF WORKFORCE DEVELOPMENT BILL) A BILL FOR An Act relating to unemployment insurance employer charges and 1 claimant misrepresentation regarding benefit overpayments, 2 providing a penalty, and including applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5187DP (7) 84 je/rj

S.F. _____ H.F. _____ Section 1. Section 96.3, subsection 7, paragraph b, 1 subparagraph (1), Code 2011, is amended to read as follows: 2 (1) (a) If the department determines that an overpayment 3 has been made, the charge for the overpayment against the 4 employer’s account shall be removed and the account shall 5 be credited with an amount equal to the overpayment from 6 the unemployment compensation trust fund and this credit 7 shall include both contributory and reimbursable employers, 8 notwithstanding section 96.8, subsection 5 . The employer 9 shall not be relieved of charges if benefits are paid because 10 the employer failed to respond timely or adequately to the 11 department’s request for information relating to the payment 12 of benefits. This prohibition against relief of charges shall 13 apply to both contributory and reimbursable employers. 14 (b) However, provided the benefits were not received as the 15 result of fraud or willful misrepresentation by the individual, 16 benefits shall not be recovered from an individual if the 17 employer did not participate in the initial determination to 18 award benefits pursuant to section 96.6, subsection 2 , and 19 an overpayment occurred because of a subsequent reversal on 20 appeal regarding the issue of the individual’s separation 21 from employment. The employer shall not be charged with the 22 benefits. 23 Sec. 2. Section 96.16, subsection 4, Code 2011, is amended 24 to read as follows: 25 4. Misrepresentation. 26 a. An individual who, by reason of the nondisclosure or 27 misrepresentation by the individual or by another of a material 28 fact, has received any sum as benefits under this chapter 29 while any conditions for the receipt of benefits imposed by 30 this chapter were not fulfilled in the individual’s case, or 31 while the individual was disqualified from receiving benefits, 32 shall, in the discretion of the department, either be liable 33 to have the sum deducted from any future benefits payable to 34 the individual under this chapter or shall be liable to repay 35 -1- LSB 5187DP (7) 84 je/rj 1/ 3

S.F. _____ H.F. _____ to the department for the unemployment compensation fund, a 1 sum equal to the amount so received by the individual. If 2 the department seeks to recover the amount of the benefits by 3 having the individual pay to the department a sum equal to that 4 amount, the department may file a lien with the county recorder 5 in favor of the state on the individual’s property and rights 6 to property, whether real or personal. The amount of the lien 7 shall be collected in a manner similar to the provisions for 8 the collection of past-due contributions in section 96.14, 9 subsection 3 . 10 b. The department shall assess a penalty equal to fifteen 11 percent of the amount of a fraudulent overpayment. The penalty 12 shall be collected in the same manner as the overpayment. The 13 penalty shall be added to the amount of any lien filed pursuant 14 to paragraph “a” and shall not be deducted from any future 15 benefits payable to the individual under this chapter. Funds 16 received for overpayment penalties shall be deposited in the 17 unemployment trust fund. 18 Sec. 3. APPLICABILITY. The section of this Act relating 19 to relief of charges applies to any overpayment determination 20 issued on or after July 1, 2012. The section of this Act 21 providing a penalty relating to fraudulent overpayment applies 22 to any fraudulent overpayment issued on or after July 1, 2012. 23 EXPLANATION 24 This bill prohibits the department of workforce development 25 from relieving an employer of charges against the employer’s 26 account for an overpayment of unemployment compensation 27 benefits if the overpayment occurred because the employer 28 failed to respond timely or adequately to the department’s 29 request for information relating to the payment of the 30 benefits. 31 The bill removes the prohibition against charging an 32 employer’s for an overpayment of unemployment compensation 33 benefits when the overpayment is not recovered from the 34 claimant because the employer did not participate in an initial 35 -2- LSB 5187DP (7) 84 je/rj 2/ 3

S.F. _____ H.F. _____ determination to award benefits and the overpayment occurred 1 because of a subsequent reversal on appeal regarding the issue 2 of the claimant’s separation from employment. 3 The bill establishes a penalty on individuals who receive 4 unemployment compensation benefits through fraud. The penalty 5 is equal to 15 percent of the amount of the overpayment and is 6 to be collected in the same manner as the overpayment but shall 7 not be collected from any future benefits. 8 The bill applies to any overpayment determination or 9 fraudulent overpayment issued on or after July 1, 2012. 10 -3- LSB 5187DP (7) 84 je/rj 3/ 3