Kansas Attorney General Opinion 1992-107

ROBERT T. STEPHAN
ATTORNEY GENERAL
August 17, 1992
ATTORNEY GENERAL OPINION NO. 92- 107
Joe Dick
Secretary of Human Resources
Kansas Department of Human Resources
401 S.W. Topeka Blvd.
Topeka, Kansas 66603-3182
Re: Labor and Industries--Employment Security
Law--Penalties for Violation of Act; Repayment of
Benefits Ineligible to Receive; Interest
Crimes and Punishments; Classification of Crimes
and Penalties--Sentencing--Authorized Dispositions;
Restitution
Synopsis: When a person is convicted of theft for obtaining
unemployment compensation for which he is -
ineligible, the trial court may not order interest
pursuant to K.S.A. 1991 Supp. 44-719(b)(2) as part
of restitution. Cited herein: K.S.A. 21-3701;
K.S.A. 1991 Supp. 21-4603, as amended by L. 1992,
ch. 239, § 237; 21-4610; 22-3717; 44-719.
Dear Mr. Dick:
As secretary of human resources you request our opinion
whether, following a conviction for theft by obtaining
unemployment benefits by making a false statement [K.S.A. 1991
Supp. 44-719(a) and K.S.A. 21-3701], a court may include as
part of restitution interest as set forth in K.S.A. 1991 Supp.
719(d)(2).

K.S.A. 1991 Supp. 44-719(a) provides for theft prosecutions of
individuals who obtain unemployment benefits by making false
statements:
"(a) Any person who makes a false
statement or representation knowing it to
be false or knowingly fails to disclose a
material fact, to obtain or increase any
benefit or other payment under this act,
either for such person or for any other
person, shall be guilty of theft and shall
be punished in accordance with the
provisions of K.S.A. 21-3701 and
amendments thereto."
Subsection (b) of this statute provides for penalties for
employers who make false statements and subsection (c)
provides for penalties for "[a]ny person who violates any
provisions of this act. . . ."
Subsection (d) establishes a recipient's liability for
overpayment. K.S.A. 1991 Supp. 44-719(d)(1) provides, in part:
"(d)(1) Any person who has received any
amount of money as benefits under this act
while any conditions for the receipt of
benefits imposed by this act were not
fulfilled in such person's case, or while
such person was disqualified from
receiving benefits, shall in the
discretion of the secretary, either be
liable to have such amount of money
deducted from any future benefits payable
to such person under this act or shall, be
liable to repay to the secretary for the
employment security fund any amount or-
money equal to the amount so received by
such person." (Emphasis added).
The rest of K.S.A. 1991 Supp. 44-719(d)(1) goes on to provide
generally that under certain circumstances recovery of
overpayment may be waived.
Subsection (d)(2) provides for interest:
"(2) Any benefit erroneously paid which
is not repaid shall bear interest at the
rate of 1.5% per month or fraction of a

month. If the benefit was received as a
result of fraud, misrepresentation or
willful nondisclosure of required
information, interest shall accrue from
the date of the final determination of
overpayment until repayment plus interest
is received by the secretary. If the
overpayment was without fraud,
misrepresentation or willful nondisclosure
of required information, interest shall
accrue upon any balance which remains
unpaid two years after the final
determination of overpayment is made and
shall continue until payment plus accrued
interest is received by the secretary.
Interest collected pursuant to this
section shall be paid into the special
employment security fund, except that
interest collected on federal
administrative programs shall be returned
to the federal government. Upon written
request and for good cause shown, the
secretary may abate any interest or
portion thereof provided for by this
subsection (d)(2). Interest accrued may
not be paid by money deducted from any
future benefits payable to such persons
liable for any overpayment."
K.S.A. 1991 Supp. 44-719 does not expressly address
restitution in criminal cases. Restitution is addressed in
general terms in several criminal sentencing statutes. K.S.A.
1991 Supp. 21-4603(2), as amended by L. 1992, ch. 239, S 237
makes "full or partial restitution" an authorized disposition
in connection with probation, suspended sentence, or
assignment to community corrections. K.S.A. 1991 Supp.
22-3717(1) authorizes trial courts at the time of sentencing
to order restitution as a condition of parole. K.S.A. 1991
Supp. 21-4610(4)(a) describes conditions of probation and
suspended sentence and authorizes the trial court to order the
defendant to "[m]ake reparation or restitution to the
aggrieved party for the damage or loss caused by the
defendant's crime, in an amount and manner determined by the
court and to the person specified by the court, unless the
court finds compelling circumstances which would render a plan
of restitution unworkable."

The amount of restitution to be awarded is within the trial
court's discretion. State v. Beecham, 251 Kan. 194
(1992). There are limits to a trial court's discretion,
however. In State v. Hinckley, 13 Kan.App.2d 417 (1989),
the court held that the trial court abused its discretion in
awarding restitution based on the replacement costs of certain
items, rather than on fair market value. The court described
the appropriate standard for determining the amount of
restitution to be awarded.
"Other states have held that the amount of
restitution is to be based on general
damage principles and cannot be
established by showing what it costs to
replace each item with a new article.
See, for example, Norman v. State, 468
So.2d 1063 (Fla. Dist. App. 1985), and
People v. Ensley, 477 N.E.2d 760 (Ill.
App.3d 1985).
"We do not mean to imply that the same
rigidness and proof of value that lies in
a civil damage suit applies in a criminal
case. Legislative intent is that
restitution should make victims whole and
provide both deterrents and rehabilitation
to the person who commits the crime. The
trial court would not abuse its discretion
in making the victim whole by ordering..
restitution equal to the victim's loss."
13 Kan.App.2d at 418-19.
The limit to restitution is the amount of "the victim's
loss."
In the case of unemployment compensation fraud, the victim is
the state. It is possible that an order for some interest as
part of restitution is permitted in order to compensate the
state for interest lost on the money a defendant stole.
However, the interest rate provided by K.S.A. 1991 Supp.
44-719(d)(2) -- 1.5% per month or 18% per year -- is so high
that in the present economic climate it would more than

compensate the state for its actual loss and as such would not
be properly awarded as restitution.
Very truly yours,
ROBERT T. STEPHAN
Attorney General of Kansas
Steve Phillips
Assistant Attorney General
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