Article 2. Unemployment Fund of California Unemployment Insurance Code >> Division 1. >> Part 1. >> Chapter 6. >> Article 2.

The Unemployment Fund is continued in existence as a special fund, separate and apart from all public money or funds of this state. This fund shall consist of (1) all employer contributions collected under this division; (2) interest earned upon any money in the fund; (3) any property or securities acquired through the use of money belonging to the fund; (4) all earnings of such property or securities; (5) all money credited to this state's account in the Unemployment Trust Fund pursuant to Section 903 of the Social Security Act, as amended; (6) all assessments collected pursuant to paragraph (1) of subdivision (b) of Section 1375.1; and (7) all other money received for the fund from any other source. All money in the fund shall be mingled and undivided. Notwithstanding Section 13340 of the Government Code, all money in the Unemployment Fund and in the various accounts of that fund, except any money deposited pursuant to Section 1528.5, is continuously appropriated for the purposes authorized in this article.

The Unemployment Fund shall be administered by the director exclusively for the purposes of this division without liability upon the part of the State beyond the amounts paid into and earned by the fund.

Withdrawals by the director from the Unemployment Fund are exempted from the operation of Sections 925.4 and 925.6 of the Government Code.

The State Treasurer is ex officio the treasurer and custodian of the Unemployment Fund. He shall administer the fund in accordance with the directions of the director. The official bond of the State Treasurer shall cover the faithful performance of his duties as treasurer of the Unemployment Fund.

There shall be maintained within the fund three separate accounts:
  (a) A clearing account.
  (b) An Unemployment Trust Fund account.
  (c) A benefit account.

All contributions and amounts payable to the Unemployment Fund after proper clearance shall be forwarded to the Treasurer who shall immediately deposit them in the clearing account.

All withheld income taxes and amounts payable to the Personal Income Tax Fund after proper clearance shall be forwarded to the Treasurer who shall immediately deposit them in that fund.

All worker contributions and amounts payable to the Disability Fund after proper clearance shall be forwarded to the Treasurer who shall immediately deposit them in that fund.

All amounts specified in Section 1585 payable to the Contingent Fund after proper clearance shall be forwarded to the Treasurer who shall immediately deposit them in that fund.

All amounts payable to the Unemployment Administration Fund after proper clearance shall be forwarded to the Treasurer who shall immediately deposit them in that fund.

Immediately after clearance, all money in the clearing account except interest on contributions, and penalties collected shall be deposited in or invested in the obligations of the Unemployment Trust Fund of the United States of America or its authorized agent to the credit of this State, any provisions of law in this State relating to the deposit, administration, release, or disbursement of money in the possession or custody of this State to the contrary notwithstanding. The amounts so deposited or invested shall be entered in the Unemployment Trust Fund Account.

The benefit account consists of all money requisitioned from this State's account in the Unemployment Trust Fund, except money requisitioned for administration pursuant to Section 1528.5, and any money so requisitioned, except money requisitioned for administration pursuant to Section 1528.5, shall be transferred out of the Unemployment Trust Fund account into the benefit account.

(a) Money credited to the account of this state in the Unemployment Trust Fund by the Secretary of the Treasury of the United States of America pursuant to Section 903 of the Social Security Act, as amended, may not be requisitioned from this state's account or used except for the payment of benefits and for the payment of expenses incurred for the administration of this part. Such money may be requisitioned pursuant to Section 1529 for the payment of benefits. Such money may also be requisitioned and used for the payment of expenses incurred for the administration of this part but only pursuant to a specific appropriation by the Legislature and only if the expenses are incurred and the money is requisitioned after the enactment of an appropriation law which:
  (1) Specifies the purposes for which such money is appropriated and the amounts appropriated therefor.
  (2) Limits the period within which such money may be obligated to a period ending not more than two years after the date of the enactment of the appropriation law.
  (3) Provides that the total amount which may be obligated shall be limited to the restrictions specified by, and charged in accordance with, Section 903(c)(2)(D) of the Social Security Act, as amended.
  (b) Money appropriated pursuant to this section for the payment of expenses of administration shall be requisitioned as needed for the payment of obligations incurred under such appropriation and, upon requisition, shall be deposited in the Unemployment Administration Fund, but, until expended, shall remain a part of the Unemployment Fund. The director and the Controller shall maintain a separate record of the deposit, obligation, expenditure, and return of funds so deposited. Any money so deposited which will not be expended shall be returned promptly to the account of this state in the Unemployment Trust Fund.

Except as provided in Section 1528.5, money shall be requisitioned from this State's account in the Unemployment Trust Fund solely for the payment of benefits and in accordance with authorized regulations. The director shall from time to time requisition from the Unemployment Trust Fund such amounts, not exceeding the amounts standing to this State's account therein, as he deems necessary for the payment of benefits for a reasonable future period. Upon receipt thereof the Treasurer shall deposit such money in the benefit account of the Unemployment Fund. Any balance of money requisitioned from the Unemployment Trust Fund which remains unclaimed or unpaid in the benefit account after the expiration of the period for which such sums were requisitioned shall either be considered in preparing subsequent estimates and may be utilized for the payment of benefits during succeeding periods, or, in the discretion of the director, shall be redeposited with the Secretary of the Treasury of the United States of America, to the credit of this State's account in the Unemployment Trust Fund.

The provisions of this article to the extent that they relate to the Unemployment Trust Fund, shall be operative only so long as that fund continues to exist and so long as the Secretary of the Treasury of the United States of America continues to maintain for this State a separate book account of all funds deposited therein by this State for benefit purposes, together with this State's proportionate share of the earnings of the Unemployment Trust Fund, from which no other state nor the United States is permitted to make withdrawals. If and when such Unemployment Trust Fund ceases to exist, or such separate book account is no longer maintained, all money, properties, or securities therein, belonging to the Unemployment Fund of this State shall be transferred to the treasurer of the Unemployment Fund, who shall hold, invest, transfer, sell, deposit, and release such money, properties, or securities in a manner approved by the director in accordance with the provisions of this division. Such money shall be invested in bonds or other interest-bearing obligations of the United States of America or the State of California. Such investment shall at all times be so made that all the assets of the fund shall always be readily convertible into cash when needed for the payment of benefits. The Treasurer shall dispose of securities or other properties belonging to the Unemployment Fund only under the direction of the director.

The director shall, without presenting vouchers and itemized statements therefor, withdraw from the benefit account any sums which he deems necessary for the payment of benefits for a reasonable future period. The Controller shall draw his warrant for any claim presented by the director for the payment of benefits under this account and the Treasurer shall pay the warrant. Upon the withdrawal thereof, such sums shall be deposited in a benefit payment account in such bank, savings and loan association, or public depository and under such conditions as the director determines, with the approval of the Department of Finance. Such bank, savings and loan association, or public depository shall be one in which general funds of the state may be deposited, but no public deposit insurance charge or premium shall be paid out of the benefit payment account. The director may, out of funds available for administration, pay premiums on insurance for the protection of money in his possession.

Money in the benefit payment account shall be used solely to pay benefits pursuant to authorized regulations and no other disbursement shall be made therefrom, but amounts erroneously and illegally deposited in such account may be refunded therefrom, except that money credited to this State's account pursuant to Section 903 of the Social Security Act, as amended, shall be used exclusively as provided in Section 1528.5. The procedure prescribed by such regulations shall be deemed to satisfy and shall be in lieu of any and all statutory requirements not contained in this division of specific appropriation or other form of release by state officers of money in their custody prior to expenditure which might otherwise be applicable to withdrawals from the benefit payment account. Any balance of money withdrawn from the benefit account which remains unclaimed or unpaid in the benefit payment account after the expiration of the period for which such sums were withdrawn shall be considered in preparing subsequent estimates and may be utilized for the payment of benefits during succeeding periods or, in the discretion of the director, shall be redeposited in the benefit account.

Except as otherwise provided in this chapter, money in the clearing and benefit accounts may be deposited by the Treasurer, under the direction of the director, in any bank, savings and loan association, or public depositary in which public funds of the state may be deposited, but no public deposit insurance charge or premium shall be paid out of the fund. Money in the clearing and benefit accounts shall not be commingled with other state funds, but shall be maintained in a separate account on the books of the depositary. Such money shall be secured by the bank or public depositary to the same extent and in the same manner as required under Chapter 4, Part 2, Division 4, Title 2 of the Government Code if deposited in a bank or public depository, not a savings and loan association or to the same extent and in the same manner as required under Chapter 4.5 (commencing with Section 16600) of Part 2 of Division 4 of Title 2 of the Government Code if deposited in a savings and loan association and collateral pledged shall be maintained in a separate custody account.

Refunds or judgments payable pursuant to this part, may be paid from the clearing account or from the benefit account with respect to any money erroneously deposited therein, upon warrants issued by the Controller under the direction of and in accordance with authorized regulations, except that money credited to this state' s account pursuant to Section 903 of the Social Security Act, as amended, shall be used exclusively as provided in Section 1528.5. Refunds of interest, penalties, and fines and interest payable on refunds and judgments pursuant to this division may not be paid from the benefit account but may be paid from the clearing account to the extent that interest, penalties, and fines collected are currently on deposit in that account.

During such time as the Federal Social Security Act and Federal Unemployment Tax Act are amended so as to remove the requirement that all money withdrawn from the Unemployment Fund be used solely in the payment of unemployment compensation, exclusive of expenses of administration, and for refunds of sums erroneously paid into such fund and refunds paid in accordance with the provisions of Section 3305(b) of the Federal Unemployment Tax Act, then notwithstanding any other provisions of this division to the contrary there is hereby continuously appropriated out of the Unemployment Fund for the purpose of administering this division, including salaries and other expenses of the department and the acquisition of necessary real property, all amounts collected under Section 993.

Any amounts determined by the director or his authorized representatives to be payable to employing units as refunds of contributions erroneously paid which are unclaimed at the end of three years from such determination shall be included in the revenue to the Unemployment Fund or in the case of interest or penalties, to the Contingent Fund. The employing unit or person entitled to such payment shall not thereafter maintain any claim, action or proceeding with respect to such amounts.

Whenever any warrant drawn on an account in the Unemployment Fund or on the Unemployment Administration Fund or the Contingent Fund by the Controller remains unclaimed after one year the amount thereof shall revert to the account and the fund from which the amount was payable.