Senate committee advances bill with technical changes to unemployment insurance, identity verification and school authorization rules

The Senate Pensions and Labor Committee on an 11-0 vote advanced Senate Bill 371, as amended, to the Appropriations Committee after witnesses described a package of mostly technical changes to unemployment insurance administration, identity verification, reemployment services and consumer-protection rules for certain career schools.

Supporters said the amendment removes several provisions in the introduced bill and focuses the measure on operational updates intended to reduce paperwork, better target reemployment services and preserve funds to modernize the unemployment insurance (UI) system. "This is a big bill, and I know it's kind of a big amendment, and it's mostly technical unemployment insurance changes," Sarah Potter, director of legislative affairs at the Department of Workforce Development, told the committee.

Potter said the amendment contains a range of revisions that the department regards as administrative or protective of agency resources. Among the most substantive changes she identified, the amendment:

- Removes provisions related to the definition of deductible income and professional-employer-organization (PEO) level reporting; - Eliminates a statutory requirement that employer notices be sent by registered mail and increases the use of electronic notice to employers; - Raises the processing fee for requests to the department's "last known employer" (LKE) database from $2 to $10 for third-party requesters while keeping claimant requests free; - Caps bank invoice charges for subpoenas in UI fraud investigations at $30; - Allows the penalty-and-interest fund (referred to in discussion as the special employment and training services fund) to be retained for UI modernization rather than reverting excess to the UI trust fund once the statutory cap is reached; - Makes RESEA (reemployment services and eligibility assessment) program language more permissive so staff can better target services and remove the six-week in-person attendance deadline; and - Adds a modest compliance and enforcement mechanism for the Office for Career and Technical Schools (OCTS) to ensure providers seeking authorization pay required fees and, when appropriate, receive notice and an opportunity to cure.

Potter explained why specific fee and invoice limits were included. She said the LKE database had been used increasingly by creditors and debt collectors and that the department processes "over 125 records requests each year," most from creditors. "Due to the low fee, this has become a very affordable tool for these debt collectors," she said, and raising the fee from $2 to $10 would better reflect administrative costs while claimants' own record requests remain free.

On subpoena costs during fraud investigations, Potter said banks' invoices for producing financial records have ranged "from $30 to $400," and the amendment caps those invoices at $30 to prevent the agency from being charged excessive amounts in routine investigations.

Potter described the RESEA changes as flexibility to target services rather than a universal requirement. "Currently, the statute ... requires individuals to visit WorkOne in person by the sixth week that they're on unemployment insurance," she said. The amended language would replace the mandatory six-week attendance with permissive language so staff can bring in claimants most likely to benefit from reemployment coaching and training. "We just want the additional flexibility to make sure that in periods of high unemployment, we're not getting out over our skis," Potter said.

The amendment also moves the identity-verification step earlier in the process. Potter said the department currently uses two verification options: ID.me (an electronic verification vendor) and the U.S. Postal Service (an in-person option). Under the amendment, claimants who have not previously verified their identity with DWD must verify "in the form and manner prescribed by the department" before filing a new claim, rather than after filing and before release of payments. Potter said the change aims to reduce fraudulent claims and lower the agency's fraud-investigation caseload.

On the OCTS provisions, Potter told the committee that the office regulates certain non-degree, postsecondary proprietary institutions and that the statute lacked an enforcement mechanism to ensure providers obtain authorization and pay renewal fees. The amendment would provide an opportunity to cure violations and use assessed penalties to fund administration of the authorization program. "The goal of this ... is not to penalize the providers. It's to encourage compliance with existing laws," Potter said.

The Indiana Manufacturers Association, which testified as neutral pending review of the amendment, had flagged two concerns in the introduced bill: changes to the deductible-income definition and repeal of the WorkOne visit requirement. Sam Sharon, vice president for governmental affairs at the IMA, said the amendment alleviated some worries but that the association would review the final language. "The WorkOne Center requirement serves two important purposes. It provides for instruction and education regarding reemployment and training opportunities, but it's also an anti-fraud measure as it allows for physical verification of identity," Sharon said.

Committee members asked technical questions about RESEA services, identity-verification methods and oversight of proprietary schools. Potter said RESEA programming includes career coaching and resume help and that the statute's change is intended to let staff concentrate resources on claimants who will derive the most benefit. When asked about verification methods, Potter confirmed that ID.me provides a photo-of-ID and a selfie match; the USPS option is an in-person verification.

The committee voted to move the bill, as amended, to the Appropriations Committee. During the roll call, the clerk recorded 11 affirmative votes and no negatives. The chair announced, "Bill passes 11 to 0."

Votes at a glance: Senate Bill 371 (as amended) — Passed to Appropriations, 11-0.

No formal fiscal note or effective date language was presented on the record during the hearing. Committee discussion and testimony focused on operational and administrative changes rather than new benefit entitlements or new eligibility criteria.