Senate Study Bill 1020 - IntroducedA Bill ForAn Act 1relating to the special employment security contingency
2fund and funding of an insurance fraud bureau special fund,
3and including effective date and retroactive applicability
1   Section 1.  Section 96.13, subsection 3, paragraph a,
2subparagraph (1), Code 2019, is amended to read as follows:
   3(1)  There is created in the state treasury a special fund
4to be known as the special employment security contingency
5fund. All interest, fines, and penalties, regardless of when
6they become payable, collected from employers under section
796.14 shall be paid into the fund.
The moneys in the fund
8 shall not be expended or available for expenditure in any
9manner which would permit their substitution for federal funds
10which would in the absence of the moneys be available to
11finance expenditures for the administration of the department.
12However, the moneys may be used as a revolving fund to
13cover expenditures for which federal funds have been duly
14requested but not yet received, subject to the charging of the
15expenditures against the funds when received. The moneys may
16be used for the payment of costs of administration which are
17found not to have been properly and validly chargeable against
18federal grants or other funds, received for the department.
19The moneys in the fund are specifically made available to
20replace, within a reasonable time, any moneys received by
21this state in the form of grants from the federal government
22for administrative expenses which because of any action or
23contingency have been expended for purposes other than, or in
24excess of, those necessary for the proper administration of
25the department. All moneys in the fund shall be deposited,
26administered, and disbursed in the same manner and under the
27same conditions and requirements as are provided by law for
28other special funds in the state treasury. Interest earned
29upon moneys in the fund shall be deposited in and credited to
30the fund.
31   Sec. 2.  NEW SECTION.  96.13A  Insurance fraud bureau special
   331.  There is created in the state treasury a special fund
34to be known as the insurance fraud bureau special fund. All
35interest, fines, and penalties, regardless of when they become
-1-1payable, collected by the department of workforce development
2from employers pursuant to section 96.14 shall be paid into the
3fund. Moneys in the fund are appropriated each fiscal year
4to the insurance division within the department of commerce
5to be used for the support and maintenance of the insurance
6fraud bureau created pursuant to section 507E.2. Moneys in the
7fund are deposited, administered, and disbursed in the same
8manner and under the same conditions and requirements as are
9provided by law for other special funds in the state treasury.
10Notwithstanding section 12C.7, subsection 2, interest earned
11on moneys in the fund shall be deposited in and credited to the
   132.  The treasurer of state shall be the custodian of the
14fund and shall give a separate and additional bond conditioned
15upon the faithful performance of the treasurer’s duties in
16connection with the fund in an amount and with sureties as
17shall be fixed and approved by the governor. The premium for
18the bond shall be paid from the moneys in the fund. All sums
19recovered on the bond for losses sustained by the fund shall be
20deposited in the fund. Refunds of interest and penalties shall
21be paid only from the fund.
   223.  Notwithstanding section 8.33, moneys remaining in the
23fund at the end of each fiscal year shall not revert to any fund
24and shall remain in the fund.
25   Sec. 3.  2017 Iowa Acts, chapter 169, section 27, subsection
262, as amended by 2018 Iowa Acts, chapter 1169, section 10, is
27amended by striking the subsection.
28   Sec. 4.  RETROACTIVE APPLICABILITY.  This Act applies
29retroactively to July 1, 2018.
30   Sec. 5.  EFFECTIVE DATE.  This Act, being deemed of immediate
31importance, takes effect upon enactment.
33The inclusion of this explanation does not constitute agreement with
34the explanation’s substance by the members of the general assembly.
   35This bill relates to the creation and funding of the
-2-1insurance fraud bureau special fund and to the special
2employment security contingency fund.
   3Currently, the law requires the department of workforce
4development (IWD) to collect and deposit into the special
5employment security contingency fund (special fund) all
6interest, fines, and penalties collected from employers due to
7their failure to comply with unemployment compensation fund
8contribution requirements. Some of the moneys in the special
9fund are allocated to the IWD, some are available to the IWD
10subject to restrictions, and some are available for use at the
11discretion of the IWD.
   12The bill still requires the IWD to collect the interest,
13fines, and penalties; however, the bill provides that the IWD
14is to deposit such moneys in a newly created insurance fraud
15bureau special fund. The bill further provides that all moneys
16deposited are appropriated each fiscal year to the insurance
17division to be used for the support and maintenance of the
18insurance fraud bureau. The bill also removes IWD’s authority
19for discretionary spending of moneys in the special fund for
20fiscal year 2018-2019.
   21The bill applies retroactively to July 1, 2018. The bill
22takes effect upon enactment.