LOTTERY PRIZE: PAYMENT OF UI DEBT                                                   H.B. 5437 (H-1):

                                                                                                      FLOOR SUMMARY

House Bill 5437 (Substitute H-1 as reported without amendment)

Sponsor:  Representative Dale W. Zorn

House Committee:  Commerce

Senate Committee:  Reforms, Restructuring and Reinventing

CONTENT

The bill would amend the Lottery Act to require the payment of a lottery winner's unemployment compensation debt from a prize of $1,000 or more, after higher-priority distributions of the prize amount, before any balance was paid to the winner.

The Act requires the Lottery Bureau, before paying a prize of $1,000 or more, to determine whether Department of Treasury records show that the winner has a current liability to the State or a support arrearage.  The bill also would require the Bureau, before paying a prize of $1,000 or more, to determine whether Unemployment Insurance Agency records showed that the winner had any current liability for restitution of unemployment benefits, penalty, or interest under the Michigan Employment Security Act.

Currently, after determining the amount of a liability, the Bureau must apply the amount of the prize in the following order of priority, and then pay any balance to the winner:

-- To any liability to the State other than an assigned delinquent account owed to a court.

-- To any support arrearage.

-- To any assigned delinquent account owed to a court.

The bill would require the Bureau to apply the amount of the prize to any unemployment compensation debt, after applying it to any liability to the State (other than an assigned delinquent account owed to a court) and to any support liability.

MCL 432.32                                                               Legislative Analyst:  Suzanne Lowe

FISCAL IMPACT

The bill would have an indeterminate but positive fiscal impact on the Department of Licensing and Regulatory Affairs (LARA).  It is unknown how much would be collected through unemployment compensation restitution payments made by the Bureau of State Lottery on behalf of those who owe them, but those payments would be used by LARA in two ways: Restitution for unemployment insurance (UI) benefits would serve to reduce future State Unemployment Tax Act (SUTA) payments for each employer whose employees were paid UI benefits erroneously.  Restitution for penalties and interest would be credited to the Penalty and Interest Account where they would be used, upon appropriation, to pay for a variety of administrative functions in the Unemployment Insurance Agency.

The Lottery Bureau would experience increased costs in an unknown amount in order to develop a process to match lottery prize winners against accounts being collected by the

Unemployment Insurance Agency.  Currently, before paying a prize of $1,000 or more, the Lottery checks against information from the Department of Treasury that lists delinquent accounts that are being collected by Treasury.  Information from the Unemployment Insurance Agency is not included in those data.

Date Completed:  11-29-12                                                Fiscal Analyst:  Elizabeth Pratt

                                                                                                             Josh Sefton

This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.