Unemployment Insurance - Fraud Prevention, Detection, and Enforcement

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb1510*

HOUSE BILL 1510
K2 6lr3498

By: Delegates Grammer, Arentz, Arikan, Chisholm, Fisher, M. Morgan, Nawrocki,
and Szeliga
Introduced and read first time: February 13, 2026
Assigned to: Economic Matters

A BILL ENTITLED

AN ACT concerning 1

Unemployment Insurance – Fraud Prevention, Detection, and Enforcement 2

FOR the purpose of altering and establishing certain requirements related to the 3
prevention, detection, and enforcement of unemployment insurance fraud in the 4
State, including requirements related to the use of multifactor authentication under 5
certain circumstances, reviews of claims for benefits, and the submission of proof of 6
identification by claimants; authorizing the Maryland Department of Labor to 7
recover overpaid benefits through State income tax withholding ; disqualifying 8
claimants from receiving benefits under certain circumstances ; increasing the 9
percentage of a monetary penalty assessed due to fraud and the duration of a certain 10
disqualification; requiring the Secretary of Labor to refer fraud determinations to 11
certain parties for certain purposes; and generally relating to unemployment 12
insurance. 13

BY repealing and reenacting, with amendments, 14
Article – Labor and Employment 15
Section 8–109(a)(6), 8–311, 8–809(b) and (e), 8–1305(b), and 8–1306 16
Annotated Code of Maryland 17
(2025 Replacement Volume) 18

BY adding to 19
Article – Labor and Employment 20
Section 8–805.1, 8–901.1, 8–1010, and 8–1011 21
Annotated Code of Maryland 22
(2025 Replacement Volume) 23

BY repealing and reenacting, without amendments, 24
Article – Labor and Employment 25
Section 8–809(g), 8–1301, 8–1302, and 8–1305(a) 26
Annotated Code of Maryland 27
2 HOUSE BILL 1510

(2025 Replacement Volume) 1

BY repealing and reenacting, without amendments, 2
Article – State Finance and Procurement 3
Section 3–302(a)(1) and (2)(i) 4
Annotated Code of Maryland 5
(2021 Replacement Volume and 2025 Supplement) 6

BY repealing and reenacting, with amendments, 7
Article – State Finance and Procurement 8
Section 3–302(b)(3) 9
Annotated Code of Maryland 10
(2021 Replacement Volume and 2025 Supplement) 11

BY repealing and reenacting, without amendments, 12
Article – Tax – General 13
Section 13–913 14
Annotated Code of Maryland 15
(2022 Replacement Volume and 2025 Supplement) 16

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 17
That the Laws of Maryland read as follows: 18

Article – Labor and Employment 19

8–109. 20

(a) In carrying out the requirements of this title, the Department shall: 21

(6) (I) establish and maintain a plan for ongoing investment in 22
technology; AND 23

(II) REQUIRE ON ANY PUBLICLY ACCE SSIBLE WEBSITE OR 24
ONLINE PORTAL THAT THE DEPARTMENT USES TO FACILITATE THE SUBMI SSION, 25
PROCESSING, OR PAYMENT OF BENEFITS, OR THE COLLECTION OF INFORMATION 26
FROM CLAIMANTS AND E MPLOYERS, THE USE OF MULTIFACT OR AUTHENTICATION 27
REQUIRING CLAIMANTS AND EMPLOYERS TO USE AT LEAST TWO FACTORS TO GAIN 28
ACCESS TO ANY ACCOUNT USED ON THE WEBSITE OR ONLINE PORTAL; 29

8–311. 30

(a) (1) On or before January 1 of each year, the Secretary shall submit to the 31
Governor an annual report on the administration and operation of this title during the 32
[previous] IMMEDIATELY PRECEDING fiscal year. 33

[(b)] (2) The annual report shall include: 34
HOUSE BILL 1510 3

[(1)] (I) a balance sheet for the Unemployment Insurance Fund; 1

[(2)] (II) a table that shows the amount of any benefit that was 2
ineffectively charged or not charged to the experience rating record of an employer; 3

[(3)] (III) the reason for not charging the amount of any benefit to the 4
experience rating record of an employer; 5

[(4)] (IV) by category of disqualification, the amount of any benefit that 6
was paid after a disqualification under Subtitle 10 of this title; and 7

[(5)] (V) any recommendation for an amendment to this title that the 8
Secretary considers proper. 9

(B) (1) ON OR BEFORE JANUARY 1 EACH YEAR, THE SECRETARY SHALL 10
SUBMIT TO THE GOVERNOR AND, IN ACCORDANCE WITH § 2–1257 OF THE STATE 11
GOVERNMENT ARTICLE, THE GENERAL ASSEMBLY AN ANNUAL REPORT ON THE 12
FRAUD PREVENTION AND ENFORCEMENT EFFORTS UNDER THIS TITLE DURING THE 13
IMMEDIATELY PRECEDING FISCAL YEAR. 14

(2) THE ANNUAL REPORT SHALL INCLUDE: 15

(I) THE NUMBER OF INELIG IBLE CLAIMANTS DETEC TED BY A 16
REVIEW UNDER § 8–805.1 OF THIS TITLE AND AN ESTIMATED DOL LAR AMOUNT OF 17
SAVINGS DUE TO THE DETECTION THAT MAY BE DETERMINED USING: 18

1. THE NUMBER OF INELIGIBLE CLAIMS DETECTED; 19

2. THE AVERAGE NUMBER O F WEEKS CLAIMANTS 20
RECEIVED BENEFITS FOR THE REPORTING PERIOD; AND 21

3. THE AVERAGE WEEKLY BENEF IT DISTRIBUTED TO 22
CLAIMANTS DURING THE REPORTING PERIOD; 23

(II) THE NUMBER OF CLAIMA NTS FOR WHOM THE SECRETARY 24
CONCLUDED A REVIEW REQUIRED UN DER § 8–805.1 OF THIS TITLE BUT INITIATED 25
THE PAYMENT OF BENEFITS DUE TO AN INABILITY TO ESTABLISH CONTACT WITH AN 26
EMPLOYER DURING THE REVIEW; 27

(III) THE TOTAL AMOUNT OF BENEFITS PAID TO CLA IMANTS IN 28
VIOLATION OF § 8–1301 OF THIS TITLE; 29

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(IV) FOR ALL IMPROPER PAY MENTS NOT RECOVERED DUE TO 1
FRAUD, A LIST OF THE FOUR PRIMARY REASONS WHY THE DEPARTMENT WAS 2
UNABLE TO RECOVER THE PAYMENTS; AND 3

(V) 1. THE NUMBER OF CASES OF SUSPECTED FRAUD 4
REFERRED TO LAW ENFO RCEMENT FOR FURTHER INVESTIGATION AND PO SSIBLE 5
PROSECUTION IN ACCORDANCE WITH § 8–1306(B) OF THIS TITLE; AND 6

2. THE AGENCIES TO WHIC H THE CASES INCLUDED 7
UNDER ITEM 1 OF THIS ITEM WERE REFERRED, WHEN THEY WERE REFERRED, AND 8
THE AMOUNT OF CLAIMED OR PAID BENEFITS IN EACH CASE. 9

(3) THE SECRETARY SHALL PUBLISH THE REPORT REQUIRED UNDER 10
THIS SUBSECTION ON THE DEPARTMENT’S PUBLICLY ACCESSIBLE WEBSITE. 11

8–805.1. 12

(A) WHEN FILING A CLAIM F OR BENEFITS , IF A CLAIMANT ENROLLS IN 13
DIRECT DEPOSIT AND PROVIDES BANK ACCOUNT INFORMATION THAT IS IDENTICAL 14
TO BANK ACCOUNT INFORMATION THAT HAS BEEN USED WITHIN THE IMMEDIATELY 15
PRECEDING 6 MONTHS FOR AN EXISTING CLAI M FOR BENEFITS FOR A DIFFERENT 16
BENEFIT YEAR OR FOR A DIFFERENT CLAIMANT , THE SECRETARY SHALL REVIE W 17
THE PENDING CLAIM BY: 18

(1) CONTACTING BY TELEPHONE THE CLAIMANT WHO IS USING THE 19
BANK ACCOUNT FOR THE PENDING CLAIM; 20

(2) CONFIRMING THE CLAIMANT DID IN FACT SUBMIT THE CLAIM FOR 21
BENEFITS; 22

(3) ATTEMPTING TO CONTACT THE CLAIMANT’S FORMER EMPLOYER 23
BY TELEPHONE TO VERIFY THE CLAIMANT’S EMPLOYMENT STATUS; AND 24

(4) CONFIRMING THE CLAIM MEETS ALL OTHER ELIGIBILITY 25
REQUIREMENTS UNDER THIS TITLE. 26

(B) WHEN FILING A CLAIM F OR BENEFITS , IF A CLAIMANT PROVIDES A 27
MAILING ADDRESS THAT IS IN USE FOR A DIFFERENT CLAIMANT W HOSE CLAIM IS 28
PENDING OR WHO IS AC TIVELY RECEIVING BEN EFITS, THE SECRETARY SHALL 29
REVIEW THE CLAIMS AND CLAIMANTS INVOLVED BY: 30

(1) CONTACTING BY TELEPHONE THE CLAIMANTS FOR WHOM THE 31
MAILING ADDRESSES ARE IDENTICAL; 32
HOUSE BILL 1510 5

(2) ATTEMPTING TO CONTACT THE CLAIMANTS’ FORMER EMPLOYERS 1
BY TELEPHONE TO VERIFY THE CLAIMANTS’ EMPLOYMENT STATUS; AND 2

(3) CONFIRMING THE CLAIMS MEET ALL OTHER ELIGIBILITY 3
REQUIREMENTS UNDER THIS TITLE. 4

(C) WHEN FILING A CLAIM FOR BENEFITS THROUGH AN ONLINE PORTAL OR 5
WEBSITE MADE AVAILABLE BY THE DEPARTMENT, IF, AT THE TIME OF FILIN G THE 6
INTERNET PROTOCOL ADDRESS ASSOCIATED WITH THE DEVICE FROM WHICH THE 7
CLAIM IS FILED IS BASED OUT SIDE THE STATE OR IDENTICAL TO THE INTERNET 8
PROTOCOL ADDRESS ASSOCIATED WITH AN EXISTING CLAIM FILED FOR A 9
DIFFERENT CLAIMANT, THE SECRETARY SHALL CONDUCT A REVIEW BY: 10

(1) CONTACTING BY TELEPHONE EACH CLAIMANT WHO FILED THE 11
CLAIM IDENTIFIED UNDER THIS SUBSECTION; 12

(2) ATTEMPTING TO CONTACT EACH CLAIMANT’S FORMER EMPLOYER 13
BY TELEPHONE TO VERIFY EACH CLAIMANT’S EMPLOYMENT STATUS; AND 14

(3) CONFIRMING THE CLAIM OR CLAIMS MEET ALL OTHER 15
ELIGIBILITY REQUIREMENTS UNDER THIS TITLE. 16

(D) (1) SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , IF THE 17
SECRETARY IDENTIFIES A CLAIM FOR WHICH A REVIEW IS REQUIRED U NDER THIS 18
SECTION, BENEFITS MAY NOT BE PAID TO A CLAIMANT W HOSE CLAIM IS UNDER 19
REVIEW UNTIL THE REVIEW IS COMPLETE. 20

(2) IF THE SECRETARY IS UNABLE T O REACH AN EMPLOYER FOR A 21
REVIEW REQUIRED UNDE R THIS SECTION AND FRAUD IS OTHERWISE NOT 22
SUSPECTED, THE SECRETARY MAY CONCLUDE THE REVIEW AND ALLOW THE CLAIM 23
TO PROCEED. 24

(E) THE SECRETARY SHALL ADOPT PROCEDURES TO CARRY OUT THIS 25
SECTION. 26

8–809. 27

(b) If the Secretary finds that a claimant knowingly made a false statement or 28
representation or knowingly failed to disclose a material fact to obtain or increase a benefit 29
or other payment under this title, in addition to disqualification of the claimant, the 30
Secretary may recover from the claimant: 31

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(1) all benefits paid to the claimant for each week for which the false 1
statement or representation was made or for which the claimant failed to disclose a 2
material fact; 3

(2) a monetary penalty of [15%] 20% of all benefits paid to the claimant 4
for each week for which the false statement or representation was made or for which the 5
claimant failed to disclose a material fact; and 6

(3) interest of 1.5% per month on the amount of all benefits paid to the 7
claimant for each week for which the false statement or representation was made or for 8
which the claimant failed to disclose a material fact plus the amount of the monetary 9
penalty accruing from the date that the claimant is notified by the Secretary that the 10
claimant was not entitled to benefits received. 11

(e) The Secretary may recover an amount under subsection (b) of this section: 12

(1) in the manner provided in § 8–630 of this title for the collection of past 13
due contributions; 14

(2) through other reasonable means of collection, including those 15
[permitted] AUTHORIZED under: 16

(i) State law for the collection of debts owed to the State , 17
INCLUDING UNDER TITLE 13, SUBTITLE 9 OF THE TAX – GENERAL ARTICLE IN 18
ACCORDANCE WITH PROCEDURES FOR WITHHOLDING TAX REFUNDS; or 19

(ii) federal law; or 20

(3) if the deduction is made by another jurisdiction under an 21
intergovernmental agreement providing for the recovery of overpaid benefits, by deduction 22
from benefits for which the claimant is eligibl e in the future under the law of the 23
jurisdiction that made the deduction, excluding the monetary penalty assessed under 24
subsection (b)(2) of this section and interest due under subsection (b)(3) of this section. 25

(g) Notwithstanding any other provision o f this section, the Secretary may 26
recover, under a governmental offset agreement, an overpayment of benefits paid to any 27
claimant under: 28

(1) the unemployment insurance law of another state; or 29

(2) a federal unemployment insurance benefit program. 30

8–901.1. 31

(A) SUBJECT TO SUBSECTION (B) OF THIS SECTION , TO BE ELIGIBLE FOR 32
BENEFITS, WHEN FILING AN INITIAL CLAIM FOR BENEFITS, A CLAIMANT SHALL 33
HOUSE BILL 1510 7

INCLUDE IN THE INITI AL CLAIM ONE OF THE FOLLOWING FORMS OF 1
IDENTIFICATION: 2

(1) A DRIVER’S LICENSE; 3

(2) A STATE IDENTIFICATION CARD; 4

(3) A SOCIAL SECURITY CARD; 5

(4) A BIRTH CERTIFICATE; 6

(5) A PASSPORT; 7

(6) A MARRIAGE CERTIFICATE; 8

(7) A MILITARY IDENTIFICATION CARD; 9

(8) A VETERAN IDENTIFICATION CARD; 10

(9) A PROFESSIONAL LICENSE ISSUED BY A GOVERNMENTAL ENTITY; 11

(10) A PASSPORT CARD; 12

(11) A TRIBAL IDENTIFICATION CARD; OR 13

(12) A PILOT’S LICENSE. 14

(B) (1) IF A CLAIMANT FILES AN INITIAL CLAIM IN PERSON, THE 15
DEPARTMENT SHALL MAKE A COPY OF THE IDENTIFICATION PROVIDED UNDER THIS 16
SECTION AND RETURN THE ORIGINAL TO THE CLAIMANT. 17

(2) IF A CLAIMANT FILES AN INITIAL CLAIM ONL INE, THE CLAIMANT 18
SHALL SUBMIT WITH THE INITIAL CLAIM A SCANNED COPY OF THE IDENTIFICATION 19
REQUIRED UNDER THIS SUBSECTION. 20

8–1010. 21

(A) AN INDIVIDUAL WHO IS OTHERWISE ELIGIBLE TO RECEIVE BENEFITS IS 22
DISQUALIFIED FROM RECEIVING BENEFITS IF THE SECRETARY FINDS THAT: 23

(1) THE INDIVIDUAL FAILED TO SUBMIT IDE NTIFICATION AS 24
REQUIRED UNDER § 8–901.1 OF THIS TITLE WHEN FILING AN INITIAL CLAIM; OR 25

8 HOUSE BILL 1510

(2) THE IDENTITY OF THE CLAIMANT CANNOT BE VERIFIED BECAUSE 1
THE NAME OF THE CLAIMANT DOES NOT MATCH THE NAME ON THE IDENTIFICATION 2
SUBMITTED WITH THE INITIAL CLAIM. 3

(B) A DISQUALIFICATION UND ER THIS SECTION SHAL L BEGIN WITH THE 4
FIRST WEEK THE CLAIMANT WOULD OTHERWISE BE ELIGIBLE TO RECEIVE BENEFITS 5
AND REMAIN IN EFFECT UNT IL THE CLAIMANT SUBM ITS VALID IDENTIFICA TION 6
THAT MATCHES THE NAME ON THE INITIAL CLAIM. 7

8–1011. 8

(A) AN INDIVIDUAL WHO IS OTHERWISE ELIGIBLE TO RECEIVE BENEFITS IS 9
DISQUALIFIED FROM RECEIVING BENEFITS I F THE SECRETARY CONDUCTS A 10
REVIEW REQUIRED UNDE R § 8–501.1 OF THIS TITLE THAT R ESULTS IN A 11
DETERMINATION THAT T HE INDIVIDUAL SHOULD BE DISQUALIFIED DUE TO 12
SUSPECTED FRAUD. 13

(B) A DISQUALIFICATION UND ER THIS SECTION SHAL L BEGIN WITH THE 14
FIRST WEEK THE CLAIMANT WAS OTHERWISE ELIGIBLE TO RECEIVE BENEFITS AND 15
REMAIN IN EFFECT FOR THE REMAINDER OF THE BENEFIT YEAR. 16

8–1301. 17

A person, for that person or another, may not knowingly make a false statement or 18
false representation or knowingly f ail to disclose a material fact to receive or increase a 19
benefit or other payment under this title or an unemployment insurance law of another 20
state, the federal government, or a foreign government. 21

8–1302. 22

An employer, its officer or agent, or another person may not: 23

(1) knowingly make a false statement or false representation or knowingly 24
fail to disclose a material fact to: 25

(i) prevent or reduce the payment of a benefit to an individual who 26
is entitled to the benefit; 27

(ii) avoid becoming or remaining subject to this title; or 28

(iii) avoid or reduce any contribution or other payment that is 29
required from an employer under this title; or 30

(2) willfully fail or refuse to: 31

HOUSE BILL 1510 9

(i) make a contribution or other payment; 1

(ii) submit a report that is required under this title; 2

(iii) produce records that are required under this title; or 3

(iv) allow those records to be copied or inspected. 4

8–1305. 5

(a) Unless another penalty is provided by statute, a person who willfully violates 6
a provision of this title or a regulation adopted under this title is guilty of a misdemeanor 7
and on conviction is subject to a fine not exceeding $1,000 or imprisonment not exceeding 8
90 days or both. 9

(b) In addition to the penalty under subsection (a) of this section, a person who 10
violates § 8–1301 of this subtitle: 11

(1) shall make full restitution of the benefit unlawfully received and pay a 12
monetary penalty of [15%] 20% of the benefit unlawfully received, including interest at a 13
rate of 1.5% a month on the total amount of restitution plus the monetary penalty from the 14
date the Secretary notifies the person of the amount to be recovered; AND 15

(2) shall be disqualified from receiving benefits for any week of 16
unemployment, including the week in which a determination is made that the individual 17
filed a claim involving a false statement, false representation, or failure to disclose a 18
material fact, until 10 YEARS AFTER THE LATER OF THE DATE THAT: 19

(i) the Secretary determines that: 20

1. the benefit unlawfully received has been repaid in full; and 21

2. the monetary penalty of [15%] 20% and interest at a rate 22
of 1.5% a month on the total amount of benefit unlawfully received plus the monetary 23
penalty have been paid in full; or 24

(ii) the Secretary determines that: 25

1. in the Secretary’s sole discretion under § 8–809(f)(3) of this 26
title, the benefit unlawfully received and interest are uncollectible; and 27

2. the claimant has paid the [15%] 20% monetary penalty in 28
full[; and 29

(3) shall be disqualified from receiving benefits: 30

10 HOUSE BILL 1510

(i) if there were no other previous determinations made that the 1
individual violated § 8 –1301 of this subtitle during the immediately preceding 4 benefit 2
years, for 1 year from the date on which a determination is made that the individual filed 3
a claim involving a false statement, false representation, or failure to disclose a material 4
fact; 5

(ii) if there were previous determinations made that the individual 6
violated § 8–1301 of this subtitle in only 1 of the immediately preceding 4 benefit years, for 7
2 years from the date on which a determination is made that the individual filed a claim 8
involving a false statement, false representation, or failure to disclose a material fact; and 9

(iii) if there were previou s determinations made that the individual 10
violated § 8 –1301 of this subtitle in more than 1 of the immediately preceding 4 benefit 11
years, for 3 years from the date on which a determination is made that the individual filed 12
a claim involving a false stateme nt, false representation, or failure to disclose a material 13
fact]. 14

8–1306. 15

(A) IN THIS SECTION , “FINAL DETERMINATION ” MEANS THE 16
DETERMINATION IN A MATTER AFTER THE EXHAUSTION OF ALL ADMINISTRATIV E 17
APPEALS AUTHORIZED UNDER THIS TITLE. 18

(B) (1) IF A FINAL DETERMINATION IS MAD E THAT A PERSON HAS 19
COMMITTED A VIOLATIO N UNDER § 8–1301 OR § 8–1302(1) OF THIS SUBTITLE , 20
WITHIN 30 DAYS AFTER THE FINAL DETERMINATION IS MADE , THE SECRETARY 21
SHALL REFER THE MATTER TO THE APPROPRIATE FEDERAL, STATE, OR COUNTY 22
LAW ENFORCEMENT AGENCY FOR PROSECUTION. 23

(2) SUBJECT TO § 8–625(D)(1) OF THIS TITLE , WHEN REFERRING A 24
MATTER UNDER PARAGRA PH (1) OF THIS SUBSECTION , THE SECRETARY SHALL 25
INCLUDE IN THE REFERRAL: 26

(I) THE NAME AND CONTACT INFORMATION ON RECORD OF THE 27
PERSON SUSPECTED OF THE VIOLATION; AND 28

(II) ANY OTHER INFORMATIO N REPORTED TO THE 29
DEPARTMENT OR IN THE DEPARTMENT’S POSSESSION RELATIN G TO THE 30
SUSPECTED VIOLATION. 31

(C) A prosecution under § 8 –1301, § 8–1302, or § 8 –1305(a) of this subtitle shall 32
be instituted within 3 years after the date on which the offense was committed. 33

(D) (1) THIS SUBSECTION APPLI ES ONLY TO AN INDIVIDUAL WHO 34
VIOLATES § 8–1301 OF THIS SUBTITLE WHILE CONCURRENTLY E MPLOYED BY A 35
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GOVERNMENTAL UNIT OR A CONTRACTOR OF A GOVERNMENTAL UNIT AT THE TIME 1
THE FRAUDULENT CONDU CT LEADING TO A FINAL D ETERMINATION WAS 2
COMMITTED. 3

(2) WITHIN 30 DAYS AFTER A FINAL DETERMINATION IS MAD E, THE 4
SECRETARY SHALL NOTIFY THE INDIVIDUAL’S EMPLOYER OF THE FINAL 5
DETERMINATION. 6

(3) (I) ON RECEIPT OF A NOTIFICATION UNDER PARAGRAPH (2) OF 7
THIS SUBSECTION, IF THE INDIVIDUAL IS STILL EMPLOYED, THE EMPLOYER SHALL 8
INITIATE PROCEEDINGS TO TERMINATE THE INDIVIDUAL’S EMPLOYMENT. 9

(II) NOTWITHSTANDING ANY O THER PROVISION OF LA W OR 10
TERM OF A COLLECTIVE BARGAINING AGREEMENT, A VIOLATION OF § 8–1301 OF 11
THIS SUBTITLE MADE BY A FINAL DETERMINATION IS CONSIDERED GROUNDS FOR 12
IMMEDIATE TERMINATION. 13

Article – State Finance and Procurement 14

3–302. 15

(a) (1) Except as otherwise provided in subsection (b) of this section , 16
paragraph (2)(ii) of this subsection, or in other law, the Central Collection Unit is 17
responsible for the collection of each delinquent account or other debt that is owed to the 18
State or any of its officials or units. 19

(2) (i) Except as provided in sub paragraph (ii) of this paragraph, an 20
official or unit of the State government shall refer to the Central Collection Unit each debt 21
for which the Central Collection Unit has collection responsibility under this subsection 22
and may not settle the debt. 23

(b) Unless, with the approval of the Secretary, a unit of the State government 24
assigns the claim to the Central Collection Unit, the Central Collection Unit is not 25
responsible for and may not collect: 26

(3) any unemployment insurance contribution or overpayme nt, EXCEPT 27
FOR AN OVERPAYMENT CAUSED BY FRAUD; 28

Article – Tax – General 29

13–913. 30

(a) (1) Except as provided in paragraph (2) of this subsection, for any debt not 31
excepted by law from the Central Collection Unit’s responsibilities under Title 3, Subtitle 32
12 HOUSE BILL 1510

3 of the State Finance and Procurement Article or otherwise, the Central Collection Unit 1
may: 2

(i) certify to the Comptroller the existence of any debt that has been 3
referred to it for collection by a State agency; and 4

(ii) request the Comptroller t o withhold the sum certified from any 5
income tax refund to which a debtor is entitled. 6

(2) A debt may not be withheld if the State agency or the Central Collection 7
Unit has been advised by the Attorney General that the validity of the debt is legitimately 8
in dispute or an alternate means of collection is pending and believed to be adequate. 9

(b) (1) The Department of Budget and Management shall establish by 10
regulation those classes or categories of debts, including any minimum debt amount, tha t 11
may be referred to the Central Collection Unit for withholding. 12

(2) Subject to § 13 –918 of this subtitle, if more than one State agency is 13
owed money by the same debtor, any amount withheld from an income tax refund shall be 14
applied in the order of referral of the debt by the State agencies. 15

(c) (1) Subject to paragraph (2) of this subsection, the withholding of debt from 16
an income tax refund authorized by this part does not preclude use of any other remedy 17
provided by law for the collection of debts owed to the State and this part shall be liberally 18
construed to effectuate its purposes. 19

(2) This part shall be interpreted in a manner that does not deprive a 20
debtor of any rights or defenses that would be available to that debtor in defending against 21
a claim of setoff incident to a judicial proceeding. 22

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 23
1, 2026. 24