House Study Bill 18 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON LABOR BILL BY CHAIRPERSON FORRISTALL) 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 1325YC (3) 85 je/rj

H.F. _____ Section 1. Section 96.3, subsection 7, paragraph b, 1 subparagraph (1), Code 2013, 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 shall 9 not be relieved of charges if benefits are paid because the 10 employer or an agent of the employer failed to respond timely 11 or adequately to the department’s request for information 12 relating to the payment of benefits. This prohibition 13 against relief of charges shall apply to both contributory and 14 reimbursable employers. 15 (b) However, provided the benefits were not received as the 16 result of fraud or willful misrepresentation by the individual, 17 benefits shall not be recovered from an individual if the 18 employer did not participate in the initial determination to 19 award benefits pursuant to section 96.6, subsection 2 , and 20 an overpayment occurred because of a subsequent reversal on 21 appeal regarding the issue of the individual’s separation 22 from employment. The employer shall not be charged with the 23 benefits. 24 Sec. 2. Section 96.16, subsection 4, Code 2013, is amended 25 to read as follows: 26 4. Misrepresentation. 27 a. An individual who, by reason of the nondisclosure or 28 misrepresentation by the individual or by another of a material 29 fact, has received any sum as benefits under this chapter 30 while any conditions for the receipt of benefits imposed by 31 this chapter were not fulfilled in the individual’s case, or 32 while the individual was disqualified from receiving benefits, 33 shall, in the discretion of the department, either be liable 34 to have the sum deducted from any future benefits payable to 35 -1- LSB 1325YC (3) 85 je/rj 1/ 3

H.F. _____ the individual under this chapter or shall be liable to repay 1 to the department for the unemployment compensation fund, a 2 sum equal to the amount so received by the individual. If 3 the department seeks to recover the amount of the benefits by 4 having the individual pay to the department a sum equal to that 5 amount, the department may file a lien with the county recorder 6 in favor of the state on the individual’s property and rights 7 to property, whether real or personal. The amount of the lien 8 shall be collected in a manner similar to the provisions for 9 the collection of past-due contributions in section 96.14, 10 subsection 3 . 11 b. The department shall assess a penalty equal to fifteen 12 percent of the amount of a fraudulent overpayment. The penalty 13 shall be collected in the same manner as the overpayment. The 14 penalty shall be added to the amount of any lien filed pursuant 15 to paragraph “a” and shall not be deducted from any future 16 benefits payable to the individual under this chapter. Funds 17 received for overpayment penalties shall be deposited in the 18 unemployment trust fund. 19 Sec. 3. APPLICABILITY. The section of this Act amending 20 section 96.3, subsection 7, relating to relief of charges, 21 applies to any overpayment determination issued on or after 22 July 1, 2013. 23 Sec. 4. APPLICABILITY. The section of this Act amending 24 section 96.16, subsection 4, providing a penalty relating to 25 fraudulent overpayment, applies to any fraudulent overpayment 26 issued on or after July 1, 2013. 27 EXPLANATION 28 This bill prohibits the department of workforce development 29 from relieving an employer of charges against the employer’s 30 account for an overpayment of unemployment compensation 31 benefits if the overpayment occurred because the employer or an 32 agent of the employer failed to respond timely or adequately 33 to the department’s request for information relating to the 34 payment of the benefits. 35 -2- LSB 1325YC (3) 85 je/rj 2/ 3

H.F. _____ The bill removes the prohibition against charging an 1 employer’s account for an overpayment of unemployment 2 compensation benefits when the overpayment is not recovered 3 from the claimant because the employer did not participate in 4 an initial determination to award benefits and the overpayment 5 occurred because of a subsequent reversal on appeal regarding 6 the issue of the claimant’s separation from employment. 7 The bill establishes a penalty on individuals who receive 8 unemployment compensation benefits through fraud. The penalty 9 is equal to 15 percent of the amount of the overpayment and is 10 to be collected in the same manner as the overpayment but shall 11 not be collected from any future benefits. 12 The bill applies to any overpayment determination or 13 fraudulent overpayment issued on or after July 1, 2013. 14 -3- LSB 1325YC (3) 85 je/rj 3/ 3