40 TAC §815.12
The Texas Workforce Commission (Commission) adopts on an
emergency basis new §815.12 Waiver of Repayment and Recovery of Temporary
Extended Unemployment Compensation Overpayments to Chapter 815, Unemployment
Insurance, Subchapter B. Benefits, Claims and Appeals. This emergency rule
is being simultaneously proposed for adoption in the proposed section of this
issue of the
Texas Register
.
The Commission is adopting this rule on an emergency basis because TEUC
is part of the provisions that were signed into law on March 9, 2002, by the
President. Since there is no state law that permits waiver of repayment of
overpayments, the federal law requires that the Commission adopt this rule
on an emergency basis in order to implement the program in a timely manner.
The purpose of the rule is to set forth the provisions relating to the TEUC
repayment waiver process, including:
(1) the method for requesting the waiver;
(2) the applicable time limit for making the request;
(3) the explanation for the "fault" and "equity and good conscience" provisions;
(4) the definition of "financial hardship;" and
(5) the clarification regarding the appeal of the denial of a request for
waiver.
Background/History: On March 9, 2002, the President signed into law as
Public Law 107-147 "Job Creation and Worker Assistance Act of 2002," which
included Title II related to the "Temporary Extended Unemployment Compensation"
(TEUC) program. The TEUC program provides qualified unemployed individuals
with up to 13 weeks of temporary extended Unemployment Insurance (UI) benefits.
Under the TEUC provisions, these TEUC benefits are 100% federally funded.
Thus, payment of the TEUC benefits will not impact the Texas UI Trust Fund.
Therefore, payment of TEUC benefits does not subject taxed employers' accounts
to chargeback, nor are accounts of reimbursing employers subject to reimbursement
as a result of the payment of TEUC benefits. In addition, the TEUC benefits
paid to the claimants will not impact the UI tax rates of the base period
employers. Under §206(b) of the TEUC provisions, a state is required
to obtain repayment and recovery (repayment) of overpayments from claimants
who have received TEUC benefits to which they were not entitled (whether fraudulent
or non-fraudulent), unless the state, under the optional language of §
206(b), elects to waive repayment of the TEUC overpayment. A state may elect
to implement a TEUC waiver procedure even if it has no waiver provisions under
state law for regular compensation. If the state elects to have a TEUC waiver
and has a state law with waiver provisions for regular compensation, the state
provision may be applied to TEUC. The Commission has elected to implement
a TEUC waiver process, since there are no provisions for the waiver of non
TEUC overpayments in state law. The Commission has elected to allow the waiver
of repayment of TEUC overpayments in part due to a recognition that because
of the large number of qualified applicants and the critical urgency of processing
payments, there may be occasional mis-payments that result through no fault
of the claimants. The Commission also recognized that the TEUC was implemented
to assist those individuals who have been out of work for an extended period
of time through no fault of their own; therefore requiring these individuals
to repay an overpayment that is not their fault would be contrary to equity
and good conscience.
The Commission received guidance from the United States Department of Labor
(USDOL) through an Unemployment Insurance Program Letter (UIPL 17-02) dated
March 19, 2002, that provided instructions for implementing the legislation.
Generally, TEUC is payable to individuals who:
(1) filed an initial (new or additional) claim that was effective during
or after the week of March 15, 2001;
(2) have exhausted regular benefits or have no benefit rights due to expiration
of a benefit year ending during or after the week of March 15, 2001;
(3) have no right to regular or extended benefits under any state or federal
law; and
(4) are not receiving benefits under the Canadian law.
In addition, UIPL 17-02 provided guidance regarding the implementation
of the TEUC repayment waiver process. The Commission will implement the TEUC
repayment waiver process through the promulgation of this rule. Pursuant to
UIPL 17-02 the Commission may waive repayment of a non-fraudulent overpayment
if the Commission finds that the claimant was not at fault for the overpayment
and repayment of the overpayment by the claimant would be contrary to equity
and good conscience.
UIPL 17-02 also sets forth the requirement that the Commission publish
notice of the waiver process to the public. This notification is being accomplished
by the publication of the notice in the
Texas Register
. The notice will inform individuals about the process for applying
and qualifying for the TEUC waiver of repayment of an overpayment.
The rule requires that a claimant's written request for waiver of repayment
of an overpayment be filed within 14 days of the date the overpayment determination
and request to waive repayment of the overpayment notification are mailed
by the Commission. This requirement provides consistent filing requirements
for the request for waiver of a repayment and the appeal of an overpayment.
The common time frame will be less confusing for the claimants receiving the
overpayment determination and the request for waiver of a repayment. This
will result in more efficient administration of both repayment waiver requests
and appeals of overpayments, and a more effective system for processing claims.
In the rule the Commission permits a claimant to request a waiver from
the repayment of a TEUC overpayment if the Commission determines, on a case-by-case
basis, that: (1) the overpayment was through no fault of the claimant; and
(2) repayment of the overpayment by the claimant would be contrary to equity
and good conscience. The Commission also sets forth in the rule the criteria
for determining when equity and good conscience would result in the waiver
of a TEUC overpayment by the Commission. UIPL 17-02 provides guidance and
direction regarding implementation of the no fault and a portion of the equity
and good conscience criteria, but provides no specific criteria for the final
component of equity and good conscience, financial hardship.
To provide clarification and consistency in administering the TEUC repayment
waiver process, the Commission found that it would cause "financial hardship"
to require a claimant to repay a TEUC overpayment if the claimant meets the
criteria for TEUC benefits. The Commission has determined that individuals
eligible for TEUC benefits have been unemployed for a long period of time
through no fault of their own; and therefore, have faced significant and serious
financial burdens resulting from prolonged unemployment. For that reason,
meeting the criteria for TEUC benefits would itself be sufficient to constitute
a financial hardship upon the individuals.
For more information about the Commission and services available, see www.texasworkforce.org.
The effective date of the rule shall be immediately upon the date of filing
the adoption in the Office of the Secretary of State.
The rule is adopted on an emergency basis under Texas Labor Code §301.061,
Public Law 107-147 "Job Creation and Worker Assistance Act of 2002" regarding
the administration of the Temporary Extended Unemployment Compensation Program,
and the United States Department of Labor's Unemployment Insurance Program
Letter (UIPL 17-02) dated March 19, 2002, that provides the Texas Workforce
Commission with the authority to adopt, amend, or repeal this rule as it deems
necessary for the effective administration of Texas Workforce Commission services
and the TEUC function.
The emergency rule affects Texas Labor Code, Title 4.
§815.12.Waiver of Repayment and Recovery of Temporary Extended Unemployment Compensation Overpayments.
(a)
This section implements the Temporary Extended Unemployment
Compensation (TEUC) waiver of repayment program by setting out the process
that the Agency and Commission shall use to determine whether to waive the
repayment and recovery of non-fraudulent overpayments. The terms repayment
and recovery will be referred to as repayment in this section, and Temporary
Extended Unemployment Compensation overpayment will be referred to as overpayment.
(b)
When a decision of the Agency or Commission results in
an overpayment, an appealable determination and a request for waiver of repayment
of an overpayment are mailed to the claimant.
(c)
A claimant may appeal an overpayment determination pursuant
to the provisions of Chapter 212 of the Act and the provisions set out in §815.16
of this chapter (relating to Appeals to Appeal Tribunals from Determinations), §815.17
of this chapter (relating to Appeals to the Commission from Decisions), and §815.18
of this chapter (relating to General Rules for Both Appeal Stages).
(d)
A claimant's written request for waiver of repayment of
an overpayment must be filed within 14 days of the date a request to waive
the repayment of an overpayment notification is mailed by the Agency. The
filing must be in accordance with §815.16 (1)(A) of this chapter (relating
to Appeals to Appeal Tribunals from Determinations).
(e)
The Agency or Commission will deny a request to waive the
repayment of a non-fraudulent overpayment if it determines that:
(1)
the payment of TEUC benefits is the fault of the claimant,
or
(2)
the repayment is not contrary to equity and good conscience.
(f)
The Agency or Commission will waive the repayment of a
non-fraudulent overpayment if it determines that:
(1)
the payment of TEUC benefits is not the fault of the claimant,
and
(2)
the repayment is contrary to equity and good conscience.
(g)
In determining whether fault exists, the Agency or Commission
shall consider the following:
(1)
whether a material statement or representation was made
by the claimant in connection with the application for TEUC that resulted
in an overpayment, and whether the claimant knew or should have known that
the statement or representation was inaccurate;
(2)
whether the claimant failed or caused another to fail to
disclose a material fact, in connection with an application for TEUC that
resulted in an overpayment, and whether the claimant knew or should have known
that the fact was material;
(3)
whether the claimant knew or could have been expected to
know that the claimant was not entitled to the TEUC payment; and
(4)
whether, for any other reason, the overpayment resulted
directly or indirectly, and partially or totally, from any act or omission
of the claimant or of which the claimant had knowledge, and which was erroneous
or inaccurate or otherwise wrong.
(h)
In determining whether equity and good conscience exists,
the Agency or Commission shall consider the following factors:
(1)
whether the overpayment is the result of a decision on
appeal;
(2)
whether the Agency gave notice to the claimant that the
claimant may be required to repay the overpayment in the event of a reversal
of a TEUC eligibility determination on appeal; and
(3)
whether repayment of the TEUC overpayment will cause financial
hardship to the claimant.
(i)
The Commission has determined that requiring the claimant
to repay a TEUC overpayment will cause financial hardship to the claimant,
because in order to receive TEUC benefits, the claimant had to have been unemployed
for an extended period of time.
(j)
A claimant may appeal a denial of a request to waive the
repayment of an overpayment pursuant to subsection (c) of this section.
(k)
Hearings under this section will be conducted in a fair
and impartial manner in accordance with the provisions of §815.15 of
this chapter (relating to Parties with Appeal Rights), §815.16 of this
chapter (relating to Appeals to Appeal Tribunals from Determinations), §815.17
of this chapter (relating to Appeals to the Commission from Decisions), and §815.18
of this chapter (relating to General Rules for Both Appeal Stages), except
to the extent that the sections are clearly inapplicable.
This agency hereby certifies that the emergency adoption
has been reviewed by legal counsel and found to be within the agency's legal
authority to adopt.
Filed with the Office of
the Secretary of State on April 23, 2002.
TRD-200202504
John Moore
Acting General Counsel
Texas Workforce Commission
Effective Date: April 23, 2002
Expiration Date: August 21, 2002
For further information, please call: (512) 463-2573