Bill Text: NJ A4186 | 2012-2013 | Regular Session | Introduced
Bill Title: Concerns assessment of penalties for certain fraudulently obtained unemployment benefits and requires recovered penalties deposited into unemployment compensation fund.
Spectrum: Partisan Bill (Republican 24-1)
Status: (Introduced - Dead) 2013-06-24 - Substituted by S2738 [A4186 Detail]
Download: New_Jersey-2012-A4186-Introduced.html
LEGISLATIVE FISCAL ESTIMATE
ASSEMBLY, No. 4186
STATE OF NEW JERSEY
215th LEGISLATURE
DATED: JUNE 20, 2013
SUMMARY
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Synopsis: |
Concerns assessment of penalties for certain fraudulently obtained unemployment benefits and requires recovered penalties deposited into unemployment compensation fund. |
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Type of Impact: |
Revenue loss to the unemployment compensation auxiliary fund (UCAF) matched by an equal revenue gain for the unemployment insurance compensation trust fund (UI trust fund). |
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Agencies Affected: |
Department of Labor and Workforce Development |
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Office of Legislative Services Estimate |
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Fiscal Impact |
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Year 2 |
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Revenue loss - UCAF |
Indeterminate - See comments below |
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Revenue gain - UI trust fund |
Indeterminate - See comments below |
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· Assembly Bill No. 4186 requires that the Department of Labor and Workforce Development assess a 25 percent penalty on an individual who fraudulently obtains unemployment insurance compensation benefits. The bill directs that 15 percent be deposited into the UI trust fund and 10 percent be deposited into the UCAF. Currently, the penalty is 25 percent or $20, whichever is greater, and is deposited entirely in the UCAF.
· The Office of Legislative Services (OLS) estimates that this bill will result in an indeterminate revenue loss to the UCAF due to the diversion of the penalty revenue from the UCAF to the UI trust fund.
· Furthermore, the OLS estimates that this bill will result in an indeterminate revenue gain for the UI trust fund from the portion of the penalty that will now be directed to the UI trust fund.
BILL DESCRIPTION
Assembly Bill No. 4186 of 2013 requires that the Department of Labor and Workforce Development immediately deposit any amount recovered from the assessment of penalties related to the payment of unemployment benefits obtained fraudulently by an individual under the State's unemployment compensation program. The bill provides that a recovered fine of 15 percent of the amount fraudulently obtained by an individual will be immediately deposited into the UI trust fund, and a recovered fine of 10 percent of the amount fraudulently obtained will be deposited into the UCAF.
Currently, the penalty assessed against an individual that obtains benefits fraudulently is $20, or 25 percent of the amount fraudulently obtained, whichever is greater, and the recovered fine is fully deposited into the UCAF. The bill revises the penalty so that it is strictly 25 percent of the amount fraudulently obtained, and requires that the recovered fine be deposited in the UI trust fund and the UCAF.
The bill also requires that the same assessment of penalties and deposit of penalties into the State's UI trust fund and the UCAF apply to benefits obtained fraudulently by individuals under any federal unemployment compensation program.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS estimates that Assembly Bill No. 4186 will result in an indeterminate revenue loss to the UCAF matched by an indeterminate revenue gain for the UI trust fund.
Currently, a 25 percent penalty is imposed on the total amount of benefits fraudulently obtained by an individual and all recovered penalties are deposited into the UCAF. Under the bill, the penalty dedicated to the UCAF will be reduced from 25 percent to 10 percent of the total amount fraudulently obtained and the penalty dedicated to the UI trust fund will be 15 percent of the total fraudulently obtained.
The UCAF is the repository for all interest and penalties imposed upon employers and individuals for violation of unemployment insurance regulations. Moneys from the UCAF are to be used for the cost of the administration of the UI trust fund, as well as various other programs as determined by the commissioner.
Without further information from the department, it is not possible to determine with any certainty the total amount of penalties collected from individuals who fraudulently collect benefits each year.
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Section: |
Commerce, Labor and Industry |
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Analyst: |
Senior Fiscal Analyst |
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Approved: |
David J. Rosen Legislative Budget and Finance Officer |
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).
