EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0635*
SENATE BILL 635
K2 2lr2188
By: Senator Lam
Introduced and read first time: February 3, 2022
Assigned to: Finance
A BILL ENTITLED
AN ACT concerning 1
Unemployment Insurance – Appeals and Recovery of Overpayment of Benefits 2
Procedures – Revisions 3
FOR the purpose of requiring the Secretary of Labor to delegate to the Office of 4
Administrative Hearings the authority to hold contested case hearings under certain 5
circumstances; requiring the Secretary to conduct a predetermination investigation 6
before seeking the recovery of unemployment insurance benefits paid to a claimant; 7
altering certain procedures by which the Secretary may recover an overpayment of 8
unemployment insurance benefits; and generally relating to unemployment 9
insurance benefits and appeals. 10
BY repealing and reenacting, without amendments, 11
Article – Labor and Employment 12
Section 8–101(a) and 8–1305(b)(2)(i) 13
Annotated Code of Maryland 14
(2016 Replacement Volume and 2021 Supplement) 15
BY repealing and reenacting, with amendments, 16
Article – Labor and Employment 17
Section 8–101(u–1) and (x–1), 8–503, 8–5A–04, 8–5A–09, 8–809, and 8–1305(b)(2)(ii) 18
Annotated Code of Maryland 19
(2016 Replacement Volume and 2021 Supplement) 20
BY repealing and reenacting, with amendments, 21
Article – State Government 22
Section 10–203(a)(5) 23
Annotated Code of Maryland 24
(2021 Replacement Volume) 25
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 26
That the Laws of Maryland read as follows: 27 2 SENATE BILL 635
Article – Labor and Employment 1
8–101. 2
(a) In this title the following words have the meanings indicated. 3
(u–1) (1) “Mailed or otherwise delivered” means to cause to be delivered by 4
[electronic transmission] E–MAILING or physical mailing. 5
(2) “MAILED OR OTHERWISE D ELIVERED” INCLUDES TO CAUSE TO BE 6
DELIVERED BY THE INCLUSION OF A DOCUMENT IN OR ATTACHMENT OF A 7
DOCUMENT TO AN E –MAIL. 8
(3) “MAILED OR OTHERWISE D ELIVERED” DOES NOT INCLUDE 9
POSTING ON AN ONLINE PORTAL . 10
(x–1) (1) “Send” means to cause to be delivered by [electronic transmission] 11
E–MAILING or physical mailing. 12
(2) “SEND” INCLUDES TO CAUSE TO BE DELIVERE D BY THE 13
INCLUSION OF A DOCUMENT IN OR THE ATTACHMENT OF A DOCUMENT TO AN 14
E–MAIL. 15
(3) “SEND” DOES NOT INCLUDE POS TING ON AN ONLINE PORTAL . 16
8–503. 17
(A) [The] EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION, THE 18
Lower Appeals Division shall hear and decide appeals from: 19
(1) the determinations of the claims examiners; and 20
(2) review determination decisions. 21
(B) IF A CLAIMANT APPEALS A RECOVERY OF BENEFI TS BY THE SECRETARY 22
UNDER § 8–809 OF THIS TITLE IN ACCORDANCE WITH T HE PROCEDURES FOR 23
REQUESTING AN APPEAL UNDER THIS TITLE , THE SECRETARY SHALL DELEG ATE TO 24
THE OFFICE OF ADMINISTRATIVE HEARINGS THE AUTHORIT Y TO HOLD A 25
CONTESTED CASE HEARI NG IN ACCORDANCE WIT H TITLE 10, SUBTITLE 2 OF THE 26
STATE GOVERNMENT ARTICLE. 27
8–5A–04. 28
SENATE BILL 635 3
(A) [The] EXCEPT AS PROVIDED I N SUBSECTION (B) OF THIS SECTION, THE 1
Board shall hear and decide appeals from the decisions of the Lower Appeals Division and 2
claims for benefits referred by the Secretary under § 8–5A–09 of this subtitle. 3
(B) THE SECRETARY SHALL DELEG ATE TO THE OFFICE OF 4
ADMINISTRATIVE HEARINGS THE AUTHORITY TO HOLD A CONTESTED CASE 5
HEARING IN ACCORD ANCE WITH TITLE 10, SUBTITLE 2 OF THE STATE 6
GOVERNMENT ARTICLE IF A CLAIMANT OR AN EMPLOYER: 7
(1) APPEALS A DECISION OF THE LOWER APPEALS DIVISION IN 8
ACCORDANCE WITH THE PROCEDURES FOR REQUE STING AN APPEAL UNDER THIS 9
TITLE; AND 10
(2) REQUESTS THAT THE OFFICE OF ADMINISTRATIVE HEARINGS 11
CONDUCT THE APPEAL H EARING. 12
8–5A–09. 13
(a) [The] EXCEPT AS PROVIDED IN § 8–503(B) OF THIS TITLE AND § 14
8–5A–04(B) OF THIS SUBTITLE , THE Secretary shall refer a claim for benefits to the 15
Board of Appeals if the determination of the claim involves: 16
(1) a disqualification that is based on a stoppage of work because of a labor 17
dispute; 18
(2) multiple claims; or 19
(3) a difficult issue of fact or law. 20
(b) The Board of Appeals: 21
(1) promptly shall hear and decide a claim that the Secretary refers under 22
this section; and 23
(2) may designate a special examiner to hear and decide the claim. 24
8–809. 25
(a) The Secretary may recover benefits paid to a claimant if the Secretary finds 26
that the claimant was not entitled to the benefits because: 27
(1) the claimant was not unemployed; 28
(2) the claimant received or retroactively was awarded wages; or 29
4 SENATE BILL 635
(3) due to a redetermination of an original claim by the Secretary, the 1
claimant is disqualified or otherwise ineligible for benefits. 2
(b) If the Secretary finds that a claimant knowingly made a false statement or 3
representation or knowingly failed to disclose a material fact to obtain or increase a benefit 4
or other payment under this title, in addition to disqualification of the claimant, the 5
Secretary may recover from the claimant: 6
(1) all benefits paid to the claimant for each week for which the false 7
statement or representation was made or for which the claimant failed to disclose a 8
material fact; 9
(2) a monetary penalty of 15% of all benefits paid to the claimant for each 10
week for which the false statement or representation was made or for which the claimant 11
failed to disclose a material fact; and 12
(3) interest of 1.5% per month on the amount of all benefits paid to the 13
claimant for each week for which the false statement or representation was made or for 14
which the claimant failed to disclose a material fact plus the amount of the monetary 15
penalty accruing from the date that the claimant is notified by the Secretary that the 16
claimant was not entitled to benefits received. 17
(c) (1) BEFORE THE SECRETARY MAKES A FIN DING UNDER SUBSECTIO N 18
(A) OR (B) OF THIS SECTION , THE SECRETARY SHAL L CONDUCT A 19
PREDETERMINATION INV ESTIGATION BY: 20
(I) PROMPTLY SENDING WRI TTEN NOTICE TO THE C LAIMANT 21
THAT INCLUDES THE FO LLOWING INFORMATION : 22
1. THAT THE SECRETARY BELIEVES TH E CLAIMANT MAY 23
HAVE BEEN OVERPAID ; 24
2. THE SPECIFIC ALLEGED FACTS OR LEGAL BASIS FOR 25
THE SECRETARY’S BELIEF THAT THE CLAIMANT MA Y HAVE BEEN OVERPAID ; AND 26
3. INSTRUCTIONS THAT EX PLAIN HOW THE CLAIMA NT 27
MAY CONTEST THE BASI S FOR THE SECRETARY’S BELIEF THAT THE CLAIMANT MA Y 28
HAVE BEEN OVERPAID ; AND 29
(II) ALLOWING THE CLAIMAN T 30 DAYS AFTER MAILING O R 30
OTHER DELIVERY OF TH E WRITTEN NOTICE REQ UIRED UNDER THIS PAR AGRAPH TO 31
RESPOND IN WRITING OR BY TELEPHONE , AS CHOSEN BY THE CLA IMANT. 32
(2) [If] AFTER THE PREDETERMIN ATION INVESTIGATION UNDER THIS 33
SUBSECTION IS COMPLETED , IF the Secretary decides to recover benefits from a claimant 34 SENATE BILL 635 5
under subsection (a) or (b) of this section, the Secretary shall [notify] SEND WRITTEN 1
NOTICE TO the claimant of: 2
(i) the amount to be recovered; 3
(ii) the basis for the recovery of benefits, including [any evidence] 4
THE FACTUAL AND EVID ENTIARY INFORMATION that the Secretary used to make the 5
determination; 6
(iii) the weeks for which benefits were paid; 7
(iv) [the amount of any] WHETHER THE SECRETARY HAS 8
ASSESSED ANY monetary penalty [assessed] under subsection (b)(2) of this section and, IF 9
SO, THE PRECISE AMOUNT O F THE MONETARY PENAL TY AND the [reason] SPECIFIC 10
FACTUAL AND EVIDENTI ARY BASIS for the assessment of the monetary penalty; 11
(v) the provision of this title under which the Secretary determined 12
that the claimant was ineligible for benefits; [and] 13
(vi) the appeal rights available to a claimant , INCLUDING 14
INSTRUCTIONS THAT EX PLAIN: 15
1. THAT THE CLAIMANT MAY APP EAL AN OVERPAYMENT 16
DETERMINATION WITH A FAI R HEARING BEFORE THE OFFICE OF ADMINISTRATIVE 17
HEARINGS; AND 18
2. HOW AND WHEN TO APPE AL THE OVERPAYMENT 19
DETERMINATION ; AND 20
(VII) HOW AND WHEN TO FILE AN APPLICATION TO RE QUEST A 21
WAIVER OF THE OVERPA YMENT RECOUPMENT . 22
[(2)] (3) The Secretary shall allow a claimant to appeal a determination 23
regarding the recovery of benefits within 30 days after the mailing or other delivery of the 24
notice UNDER PARAGRAPH (2) OF THIS SUBSECTION . 25
(d) (1) [The] SUBJECT TO SUBSECTION (F) OF THIS SEC TION, THE 26
Secretary may recover an amount under subsection (a) of this section: 27
(i) by deduction from benefits payable to the claimant in the future; 28
(ii) in the manner provided in § 8–630 of this title for the collection 29
of past due contributions; 30
6 SENATE BILL 635
(iii) by assessment in the same manner as provided in § 8–629 of this 1
title for the assessment of past due contributions; or 2
(iv) through other reasonable means of collection, including those 3
permitted under: 4
1. State law for the collection of debts owed to the State; or 5
2. federal law. 6
(2) (i) If the Secretary seeks to recover an amount under subsection (a) 7
of this section by assessment, the Secretary shall allow a claimant to elect, within 30 days 8
of the date of the notice of assessment, to have the amount collected by suit instead of by 9
assessment. 10
(ii) The Secretary shall adopt regulations to provide general 11
guidance about: 12
1. the processes under which the Secretary may recover 13
benefits; and 14
2. the application of § 8–629 of this title to the recovery of 15
benefits by assessment under this section. 16
(e) [The] SUBJECT TO SUBSECTION (F) OF THIS SECTION, THE Secretary may 17
recover an amount under subsection (b) of this section: 18
(1) in the manner provided in § 8–630 of this title for the collection of past 19
due contributions; 20
(2) through other reasonable means of collection, including those permitted 21
under: 22
(i) State law for the collection of debts owed to the State; or 23
(ii) federal law; or 24
(3) if the deduction is made by another jurisdiction under an 25
intergovernmental agreement providing for the recovery of overpaid benefits, by deduction 26
from benefits for which the claimant is eligible in the future under the law of the 27
jurisdiction that made the deduction, excluding the monetary penalty assessed under 28
subsection (b)(2) of this section and interest due under subsection (b)(3) of this section. 29
(f) THE SECRETARY MAY NOT REC OVER AN AMOUNT UNDER SUBSECTION 30
(D) OR (E) OF THIS SECTION UNTI L THE REQUIREMENTS O F SUBSECTION (C) OF THIS 31
SECTION HAVE BEEN ME T. 32
SENATE BILL 635 7
(G) (1) The Secretary may reconsider a decision to recover benefits under 1
subsection (a) of this section within 1 year after the date that the decision was made. 2
(2) The Secretary may not make a determination to recover benefits under 3
subsection (a) or (b) of this section later than 3 years after the date that the benefits were 4
paid to the claimant. 5
(3) If an amount under subsection (a) or (b) of this section has not been 6
recovered within 5 years after the date of the decision to recover the amount, the Secretary 7
may consider the amount uncollectible. 8
(4) If the Secretary determines that the best interests of the State will be 9
served, the Secretary may adjust, compromise, or settle interest due under subsection (b) 10
of this section or under § 8–1305 of this title. 11
[(g)] (H) Notwithstanding any other provision of this section, the Secretary may 12
recover, under a governmental offset agreement, an overpayment of benefits paid to any 13
claimant under: 14
(1) the unemployment insurance law of another state; or 15
(2) a federal unemployment insurance benefit program. 16
8–1305. 17
(b) In addition to the penalty under subsection (a) of this section, a person who 18
violates § 8–1301 of this subtitle: 19
(2) shall be disqualified from receiving benefits for any week of 20
unemployment, including the week in which a determination is made that the individual 21
filed a claim involving a false statement, false representation, or failure to disclose a 22
material fact, until: 23
(i) the Secretary determines that: 24
1. the benefit unlawfully received has been repaid in full; and 25
2. the monetary penalty of 15% and interest at a rate of 1.5% 26
a month on the total amount of benefit unlawfully received plus the monetary penalty have 27
been paid in full; or 28
(ii) the Secretary determines that: 29
1. in the Secretary’s sole discretion under § [8–809(f)(3)] 30
8–809(G)(3) of this title, the benefit unlawfully received and interest are uncollectible; and 31
8 SENATE BILL 635
2. the claimant has paid the 15% monetary penalty in full; 1
and 2
Article – State Government 3
10–203. 4
(a) This subtitle does not apply to: 5
(5) unemployment insurance claim determinations, tax determinations, 6
and appeals in the Maryland Department of Labor except as specifically provided in 7
[Subtitle] SUBTITLES 5 AND 5A of Title 8 of the Labor and Employment Article; or 8
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 9
October 1, 2022. 10