Regular Session 2017-2018 House Bill 1915 P.N. 2735

PRIOR PRINTER'S NO. 2706

PRINTER'S NO. 2735

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1915

Session of

2017

INTRODUCED BY KAUFFMAN, COX, GROVE, McGINNIS, MILLARD, MENTZER,

RADER, WARD, BLOOM, DUNBAR, TOPPER, SAYLOR, TALLMAN, DUSH,

PICKETT, RYAN AND A. HARRIS, NOVEMBER 14, 2017

AS REPORTED FROM COMMITTEE ON LABOR AND INDUSTRY, HOUSE OF

REPRESENTATIVES, AS AMENDED, NOVEMBER 20, 2017

AN ACT

Amending the act of December 5, 1936 (2nd Sp.Sess., 1937

P.L.2897, No.1), entitled "An act establishing a system of

unemployment compensation to be administered by the

Department of Labor and Industry and its existing and newly

created agencies with personnel (with certain exceptions)

selected on a civil service basis; requiring employers to

keep records and make reports, and certain employers to pay

contributions based on payrolls to provide moneys for the

payment of compensation to certain unemployed persons;

providing procedure and administrative details for the

determination, payment and collection of such contributions

and the payment of such compensation; providing for

cooperation with the Federal Government and its agencies;

creating certain special funds in the custody of the State

Treasurer; and prescribing penalties," in contributions by

employers and employees, further providing for contributions

by employees and for Service and Infrastructure Improvement

Fund.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 301.4(e)(2) of the act of December 5,

1936 (2nd Sp.Sess., 1937 P.L.2897, No.1), known as the

Unemployment Compensation Law, amended April 24, 2017 (P.L.1,

No.1), is amended and the section is amended by adding

subsections to read:

Section 301.4. Contributions by Employes.--* * *

(e) Contributions paid under this section shall be allocated

by the department among the Unemployment Compensation Fund, the

Reemployment Fund and the Service and Infrastructure Improvement

Fund as follows:

* * *

(2) During each calendar year from 2013 through [2017] 2020

2021, an amount determined by the secretary with the approval of

the Governor shall be deposited into the Service and

Infrastructure Improvement Fund. For calendar year 2013, the

amount determined under this clause may not exceed forty million

dollars ($40,000,000). For calendar year 2014, the amount

determined under this clause may not exceed thirty million

dollars ($30,000,000). For calendar years 2015 and 2016, the

amount determined under this clause for each calendar year may

not exceed one hundred ninety million dollars ($190,000,000)

adjusted by the increase in the Bureau of Labor Statistics

Consumer Price Index for the period from May 2013 through

January of the calendar year less the amount of Federal

administrative funding for the preceding Federal fiscal year.

For calendar year 2017, the amount determined under this clause

may not exceed fifteen million dollars ($15,000,000). For

calendar year 2018, the amount determined under this clause may

not exceed twenty THIRTY million dollars ($20,000,000)

($30,000,000) . For calendar year 2019, the amount determined

under this clause may not exceed fifteen TWENTY-FIVE million

dollars ($15,000,000) ($25,000,000) . For calendar year 2020, the

amount determined under this clause may not exceed ten TWENTY

million dollars ($10,000,000) ($20,000,000) . FOR CALENDAR YEAR

2021, THE AMOUNT DETERMINED UNDER THIS CLAUSE MAY NOT EXCEED TEN

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MILLION DOLLARS ($10,000,000).

* * *

(g) It is the intention of the General Assembly that the

department will end its reliance on transfers to the Service and

Infrastructure Improvement Fund. Funding allocated under

subsection (e) is intended to support the operations of the

unemployment compensation system AND MAINTAIN ADEQUATE SERVICE

LEVELS FOR CLAIMANTS AND EMPLOYERS during the implementation and

initial deployment of technological upgrades to the delivery

system for unemployment compensation payments. During calendar

years 2018 through 2020 2021 , the following shall apply to

funding transferred to the Service and Infrastructure

Improvement Fund and related matters regarding the fund:

(1) The department shall expend funds for the purposes

authorized under section 301.9(c) 301.9(C)(1), (3) AND (4) to

maintain and modernize the operations of the unemployment

compensation system during the implementation and initial

deployment of technological upgrades to the delivery system for

unemployment compensation payments.

(2) The department shall maintain a separate accounting for

the Service and Infrastructure Improvement Fund.

(3) A copy of the report required under section 301.9(g)

shall be submitted to the chair and minority chair of the Labor

and Industry Committee of the Senate and the chair and minority

chair of the Labor and Industry Committee of the House of

Representatives. In addition to the information required by

section 301.9(g), the report shall include detailed information

on the following:

(i) An accounting of the Service and Infrastructure

Improvement Fund for the prior calendar year.

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(ii) An update on operations of the unemployment

compensation system, including all of the following:

(A) Compliance with Federal benchmarks.

(B) Efficiency measures and cost savings implemented by the

department.

THE TIMELINESS OF SERVICE TO CLAIMANTS AND EMPLOYERS .

(D) The department's efforts regarding the detection and

prevention of fraud and overpayments . AND THE COLLECTION OF ANY

OUTSTANDING AND DELINQUENT RECEIVABLES, INCLUDING INTEREST, FOR

EMPLOYER CONTRIBUTORY AND REIMBURSABLE ACCOUNTS.

(iii) An accounting of total funds spent on the

administration of the unemployment compensation system for the

prior calendar year.

(iv) An update on the progress of the implementation and

deployment of technological upgrades to the delivery system for

unemployment compensation benefits.

(v) An update on the department's progress toward ending its

reliance on transfers to the Service and Infrastructure

Improvement Fund.

(VI) AN UPDATE ON THE AMOUNT OF FUNDS AVAILABLE TO THE

DEPARTMENT FOR ADMINISTRATIVE COSTS FOR THE UNEMPLOYMENT

COMPENSATION SYSTEM, INCLUDING THE FOLLOWING:

(A) THE TOTAL AMOUNT OF FUNDS AVAILABLE DURING EACH OF THE

FIVE PRIOR CALENDAR YEARS.

(B) AN ESTIMATE OF THE TOTAL AMOUNT OF FUNDS THAT WILL BE

AVAILABLE FOR THE CURRENT CALENDAR YEAR AND THE TWO SUBSEQUENT

CALENDAR YEARS.

(B), A LIST OF EACH SOURCE OF AVAILABLE FUNDS AND THE AMOUNT

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FROM EACH SOURCE.

(h) In addition to the amounts allowed under subsection (e),

an amount determined by the secretary with the approval of the

Governor shall be deposited into the Service and Infrastructure

Improvement Fund for costs related to the procurement and

implementation of technological upgrades to the delivery system

for unemployment compensation benefits , CONSISTENT WITH COSTS

REPORTED TO THE GENERAL ASSEMBLY UNDER SECTION 301.9(I)(3) . The

following shall apply:

(1) For costs incurred in calendar year 2017, the amount

determined under this subsection may not exceed five million

dollars ($5,000,000). For costs incurred in calendar year 2018,

the amount determined under this subsection may not exceed seven

million two hundred thousand dollars ($7,200,000). For costs

incurred in calendar year 2019, the amount determined under this

subsection may not exceed twelve million one hundred thousand

dollars ($12,100,000). For costs incurred in calendar year 2020,

the amount determined under this subsection may not exceed five

million nine hundred thousand dollars ($5,900,000).

(2) Beginning January 1, 2018, the department may annually

deposit into the Service and Infrastructure Improvement Fund an

amount authorized by this subsection for actual costs incurred

during the prior calendar year CALENDAR YEAR 2017 . EACH QUARTER

THEREAFTER, THE DEPARTMENT MAY DEPOSIT AN AMOUNT EQUAL TO ACTUAL

COSTS INCURRED IN THE PRIOR QUARTER, SUBJECT TO THE ANNUAL

LIMITS IN CLAUSE (1).

(3) Prior to each annual deposit of funds under this

subsection the secretary shall certify to the Governor that:

(i) the progress of the implementation and deployment of

technological upgrades to the delivery system for unemployment

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compensation benefits is consistent with the progress benchmarks

provided in each relevant contract;

(ii) the total cost of the technological upgrades will not

exceed the total amount of contract costs reported to the

General Assembly under section 301.9(i)(3); and

(iii) the Benefit Modernization Advisory Committee

established under clause (6) has been regularly consulted with

regard to the implementation and deployment of the technological

upgrades.

(4) A copy of the certification under clause (3) shall be

delivered to the chair and minority chair of the Labor and

Industry Committee of the Senate and the chair and minority

chair of the Labor and Industry Committee of the House of

Representatives within fifteen (15) days of the certification to

the Governor.

(5) The department shall implement and deploy the

technological upgrades to the delivery system for unemployment

compensation benefits in a manner which will result in

significant cost savings and end the department's reliance on

transfers to the Service and Infrastructure Improvement Fund,

WHILE MAINTAINING AN ADEQUATE LEVEL OF SERVICE FOR CLAIMANTS AND

EMPLOYERS, as follows:

(i) The technological upgrades shall encourage and

facilitate the filing of unemployment compensation claims AND

INFORMATION REQUIRED TO BE PROVIDED BY EMPLOYERS via the

department's publicly accessible Internet website and other

electronic means , WHILE MAINTAINING AN ADEQUATE LEVEL OF ACCESS

TO OTHER FORMS OF FILING FOR CLAIMANTS AND EMPLOYERS .

(ii) The department shall, to the extent possible, utilize

the upgrades to automate the processes regarding claim review

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and determination.

(iii) The implementation and deployment of the upgrades

shall prioritize the generation of efficiencies throughout the

unemployment compensation system , WHILE MAINTAINING AN ADEQUATE

LEVEL OF SERVICE FOR CLAIMANTS AND EMPLOYERS .

(iv) The technological upgrades shall generate operational

efficiencies by reducing the need for claimants to contact

unemployment compensation service centers via telephone,

including augmenting the ability of claimants to amend claim

information and submit required information via the department's

publicly accessible Internet website or other electronic means

without requiring telephone contact with a service center.

(v) The department shall attempt to reduce the overall costs

to administer the unemployment compensation system by at least

twelve per centum (12%).

(6) The Benefit Modernization Advisory Committee is

established to advise the department regarding the

implementation and deployment of technological upgrades to the

delivery system for unemployment compensation benefits. The

following shall apply:

(i) The advisory committee shall consist of the following

members:

(A) Three employes of the department who will regularly

utilize the technological upgrades, appointed by the secretary.

(B) An information technology professional, appointed by the

chair of the Labor and Industry Committee of the Senate.

minority chair of the Labor and Industry Committee of the

Senate.

(D) A representative of a group representing employers,

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appointed by the chair of the Labor and Industry Committee of

the House of Representatives.

(E) An attorney experienced in representing unemployment

compensation claimants, appointed by the minority chair of the

Labor and Industry Committee of the House of Representatives.

(ii) The advisory committee shall meet within 90 days of the

effective date of this clause.

(iii) One of the members appointed under subclause (i)(A)

shall be selected as the chairperson of the advisory committee.

(iv) After the initial meeting, the chairperson of the

advisory committee shall organize quarterly meetings of the

advisory committee.

(v) The department shall provide administrative support for

the advisory committee.

(vi) Members of the advisory committee shall be provided

with monthly updates regarding the implementation and deployment

of technological upgrades to the delivery system for

unemployment compensation benefits.

(vii) The relevant department staff and representatives of

relevant project vendors shall attend each quarterly meeting of

the advisory committee.

(viii) The advisory committee shall have the following

powers and duties:

(A) The advisory committee shall monitor the implementation

and deployment of technological upgrades to the delivery system

for unemployment compensation benefits.

(B) The advisory committee may request information related

to the technological upgrades at any time. The department shall

provide information requested unless THE SPECIFIC INFORMATION IS

DETERMINED BY THE DEPARTMENT TO BE OF A PROPRIETARY INTEREST OR

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THE RELEASE OF THE INFORMATION IS prohibited by law.

department regarding the technological upgrades at any time.

(D) The advisory committee may provide the department with

assistance related to testing of the technological upgrades.

(E) The advisory committee shall provide a report, no later

than June 30 of each year, to the chair and minority chair of

the Labor and Industry Committee of the Senate and the chair and

minority chair of the Labor and Industry Committee of the House

of Representatives. The report shall include the advisory

committee's assessment of the progress regarding the

implementation and deployment of the technological upgrades, a

list of recommendations that the advisory committee has made to

the department and whether those recommendations have been

accepted. THE DEPARTMENT SHALL BE PROVIDED WITH A DRAFT COPY OF

THE REPORT AT LEAST THIRTY DAYS PRIOR TO SUBMISSION UNDER THIS

CLAUSE, AND SHALL BE PERMITTED TO INCLUDE ITS RESPONSE TO THE

CONTENTS OF THE REPORT. IN NO EVENT SHALL THE DEPARTMENT BE

ALLOWED TO DELAY THE SUBMISSION OF THE REPORT BY THE ADVISORY

COMMITTEE.

(ix) The advisory committee shall continue to exercise the

powers and duties provided under subclause (viii) until December

31, 2021, or until the advisory committee determines by a two-

thirds vote that the technological upgrades have been

successfully implemented, whichever is sooner.

Section 2. Section 301.9(c), (e) and (g) of the act, amended

April 24, 2017 (P.L.1, No.1), are amended to read:

Section 301.9. Service and Infrastructure Improvement

Fund.--* * *

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Fund are appropriated on a continuing basis, upon approval of

the Governor, to the department to be prioritized for the

following purposes:

(1) To improve the quality, efficiency and timeliness of

services provided by the service center system to individuals

claiming compensation under this act, including claim filing,

claim administration, adjudication services and staffing and

training of system employes.

(2) Expenditures for information management technology,

communications technology and other infrastructure components

that the secretary determines are likely to result in

significant and lasting improvements to the unemployment

compensation system.

(3) To pay the costs of collecting the contributions

deposited into the Service and Infrastructure Improvement Fund

pursuant to section 301.4(e)(2).

(4) To pay for costs related to the implementation and

deployment of technological upgrades to the unemployment

compensation system to end reliance on transfers to the Service

and Infrastructure Improvement Fund.

(4) TO PAY FOR ANY COSTS RELATED TO THE PREPARATION OF THE

UNEMPLOYMENT COMPENSATION SYSTEM TO END ITS RELIANCE ON

TRANSFERS TO THE SERVICE AND INFRASTRUCTURE IMPROVEMENT FUND.

* * *

(e) Any moneys in the Service and Infrastructure Improvement

Fund that are not expended or obligated as of December 31,

[2019] 2022 2023 , shall be transferred to the Unemployment

Compensation Fund under section 601.

* * *

(g) No later than June 30 of each calendar year from 2014

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through [2020] 2023 2024 , the department shall provide a report

to the Governor and the General Assembly, through the Secretary-

Parliamentarian of the Senate and the Chief Clerk of the House

of Representatives, regarding the Service and Infrastructure

Improvement Fund, which report shall include an accounting for

the contributions deposited into the fund, the expenditures and

transfers from the fund during the prior year and a description

of the purposes for which expenditures from the fund were made

in the prior year.

* * *

Section 3. This act shall take effect immediately.

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