SRC-MWN C.S.S.B. 444 77(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 444
77R15772 JMM-DBy: Fraser
Business & Commerce
5/10/2001
Committee Report (Substituted)


DIGEST AND PURPOSE 

Currently, Texas lacks specific strategies to increase the identification
and recovery of unemployment insurance benefit overpayments, while the
percentage of fraudulent overpayments identified remains below the national
average. C.S.S.B. 444 would direct the state auditor to conduct a study to
determine, to the fullest extent possible, the amount of fraudulent claims
in the unemployment insurance system. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 213A, Labor Code, by adding Section 213.010, as
follows: 

Sec. 213.010. STUDY OF BENEFIT OVERPAYMENTS AND FRAUD. (a) Requires the
state auditor to conduct a study to determine, to the fullest extent
possible, the number of fraudulent claims filed and paid under this
subtitle and the number and dollar amount of fraudulent premium
underpayments by employers. Requires the Texas Workforce Commission
(commission) to use the study to establish the most effective fraud
detection system.  

(b) Authorizes the state auditor, if the state auditor determines that the
study should be conducted, in whole or in part, by another entity, to
contract with one or more independent, nongovernmental entities to conduct
all or part of the study. Provides that notwithstanding the entities to
which the state auditor participates in the study, the state auditor is
responsible for supervising the study and for reporting the results of the
study as provided by Subsection (e). 

(c) Provides that the fraud detection system established as a result of the
study conducted under this section to incorporate the commission's
automated system for filing and paying claims.  

(d) Requires the state auditor, in developing the study, to use as a model
analogous studies performed by other governmental entities that administer
benefit programs, including the medical assistance program under Chapter 32
(Medical Assistance Program), Human Resources Code. Requires the state
auditor, in developing the study required by this section, to consider
studies performed by the United States Department of Labor and other state
employment security agencies concerning the misclassification of workers
and resulting underpayments to the unemployment insurance trust fund, and
to evaluate the use of targeted audits to reduce misclassification.
Requires the study to include thorough research on fraudulent schemes and
methods of fraud detection used in other states and an analysis of
businesses and industries most affected by fraud under this subtitle. 
 
(e) Requires the state auditor to report the results of the study to the
presiding officer of each house of the legislature not later than January
1, 2003. 

SECTION 2. Effective date: upon passage or September 1, 2001.



SUMMARY OF COMMITTEE CHANGES

SECTION 1. Amends As Filed S.B. 444, Chapter 213A, Labor Code, by amending
previously proposed Section 213.010.