Article 1. Disability Fund of California Unemployment Insurance Code >> Division 1. >> Part 2. >> Chapter 5. >> Article 1.

(a) The Unemployment Compensation Disability Fund is continued in existence as a special fund in the State Treasury, separate and apart from all other public money or funds of this state. The moneys and assets of this fund shall be held in trust by the State Treasurer and administered under the direction of the director exclusively, for the purpose of this part.
  (b) Notwithstanding any other law, the Controller may use the moneys in the Unemployment Compensation Disability Fund for loans to the General Fund as provided in Sections 16310 and 16381 of the Government Code. However, interest shall be paid on all moneys loaned to the General Fund from the Unemployment Compensation Disability Fund. Interest payable shall be computed at a rate determined by the Pooled Money Investment Board to be the current earning rate of the fund from which loaned. This subdivision does not authorize any transfer that will interfere with the carrying out of the object for which the Unemployment Compensation Disability Fund was created.

The State Treasurer is the treasurer of the Disability Fund and shall have the custody of all money belonging to the Disability Fund and not otherwise held, deposited or invested under this part. The official bond of the State Treasurer shall cover the faithful performance of his or her duties as treasurer of the Disability Fund. The State Treasurer shall invest or otherwise deal with the Disability Fund under the supervision of the director. The State Treasurer may, pursuant to Section 16470 of the Government Code, file with the Pooled Money Investment Board a notice of election that investment of surplus money in the Disability Fund shall come under the provisions of the Surplus Money Investment Fund, and may revoke such election pursuant to Section 16470 of the Government Code. As of the effective date of any election with respect to the Disability Fund filed pursuant to Section 16470 of the Government Code, the State Treasurer shall transfer the surplus money in the Disability Fund to the Surplus Money Investment Fund, and may transfer all or any portion of the investments held by the Disability Fund at the date of such election, from the Disability Fund to the Surplus Money Investment Fund. As of the effective date of the revocation of any such election, the State Treasurer shall transfer from the Surplus Money Investment Fund to the Disability Fund the surplus money and earnings attributable to the Disability Fund.

(a) Except as provided in subdivision (c), all surplus money in the Disability Fund may be invested solely in securities set forth in subdivision (b) of this section, and all interest or earnings therefrom shall be deposited in the Disability Fund.
  (b) Eligible securities for the investment of surplus money shall be:
  (1) Bonds or interest-bearing notes or obligations of the United States, or those for which the faith and credit of the United States are pledged for the payment of principal and interest.
  (2) Bonds of this state, or those for which the faith and credit of this state are pledged for the payment of principal and interest.
  (3) Bonds of any county, city, metropolitan water district, municipal utility district, or school district of this state.
  (4) Bonds, consolidated bonds, collateral trust debentures, consolidated debentures, or other obligations issued by federal land banks or federal intermediate credit banks established under the Federal Farm Loan Act.
  (5) Debentures and consolidated debentures issued by the Central Bank for Cooperatives and banks for cooperatives established under the Farm Credit Act of 1933.
  (6) Bonds or debentures of the Federal Home Loan Bank Board established under the Federal Home Loan Bank Act.
  (7) Bonds of any federal home loan bank established under the Federal Home Loan Bank Act.
  (8) Stock, bonds, debentures and other obligations of the Federal National Mortgage Association established under the National Housing Act.
  (9) Bonds, notes, and other obligations issued by the Tennessee Valley Authority under the Tennessee Valley Authority Act.
  (c) This section shall not apply during the period of any election under Section 16470 of the Government Code for investment of surplus money in the Disability Fund under the provisions of the Surplus Money Investment Fund.

The Disability Fund consists of all contributions required of individuals under Section 984 with respect to wages paid by employers for employment; all money received for the purpose of disability benefits from the United States of America or any agency thereof, or from any other source; and any property or securities acquired through the use of money belonging to the Disability Fund and all earnings of such money or securities.

All money received from the Federal Government for disability benefit purposes or for the administration of this part shall be deposited in the Disability Fund in accordance with the terms of the federal grant. Unless the Federal Government approves, no money made available to this State under Title 3 of the Social Security Act shall be used for disability benefits or for the administration of this part.

There shall be no further transfer of money from the Unemployment Trust Fund to the Disability Fund.

All money collected under Section 984 shall be deposited in the Disability Fund.

Refunds, credits, or judgments, and interest thereon, payable for contributions erroneously collected under Sections 984 and 985 may be paid from the Disability Fund on warrants issued by the Controller under the direction of the director.

Any amounts determined by the director or his authorized representatives to be payable to employing units or workers as refunds of amounts deposited in the various accounts of the Disability Fund which are unclaimed at the end of three years from such determination, shall be included in the revenue to the account in the Disability Fund in which they were deposited. 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 is drawn on an account in the Disability Fund by the Controller, and the same remains unclaimed after one year, the amount thereof shall revert to that account in the Disability Fund from which the amount was payable.

(a) Notwithstanding Section 13340 of the Government Code, all money in the Disability Fund is continuously appropriated for the purpose of providing disability benefits pursuant to this part, including the payment of refunds, credits, or judgments, and interest thereon, the payment of disability benefits to all eligible persons not covered exclusively by an approved voluntary plan, and the payment of the expenses of administration of this part and Section 17061 of the Revenue and Taxation Code by the department and the Franchise Tax Board. "Eligible persons" as used in this section, means those individuals who are covered by the Disability Fund at the time his or her disability benefit period commences, or whose employment has terminated or who is in noncovered employment at the time his or her disability benefit period commences, and who is otherwise eligible for benefits under this part.
  (b) For the purpose of keeping a record of the payments to and the disbursements from the Disability Fund with respect to the payment of benefits to persons whose employment has terminated or who are in noncovered employment at the time his or her disability period commences, the director shall maintain the Unemployed Disabled Account in the Disability Fund. This account shall be credited with 12 percent of the product obtained by multiplying the rate of worker contributions as determined in Section 984, by the amount of the taxable wages paid to employees covered by voluntary plans for disability benefits for each calendar year. This account shall also be credited with an amount equal to 12 percent of the product obtained by multiplying the rate of worker contributions, as determined in Section 984, by the amount of the taxable wages paid to employees covered by the Disability Fund for each calendar year. This account shall be charged each calendar year with disbursements from the Disability Fund for the payment of benefits and the additional administrative costs of the payment of benefits to persons whose employment has terminated or who are in noncovered employment at the time his or her disability benefit period commences.

A sum to be determined by the Director of Finance, of amounts deposited in the disability fund, may be used for the necessary expenses of administration of this part and Sections 17061 and 17061.5 of the Revenue and Taxation Code in addition to any other fund or money available for such purpose. Such sum shall be available to the department for the payment of the expenses of administration of this part and Sections 17061 and 17061.5 of the Revenue and Taxation Code by the department and the Franchise Tax Board only to the extent that money received from the United States or any of its agencies is not available for such purposes.

Withdrawals by the director from the Disability Fund for the payment of refunds, credits, or judgments, and disability benefits are exempted from the operation of Section 925.6 of the Government Code.

The department shall have priority to occupy any space in the buildings and facilities financed by the Disability Fund, which comprise any space in the department's central office building and related parking facilities in Sacramento and the department's branch office in Los Angeles, at rental rates not exceeding the cost of providing maintenance and other services.