HOUSE BILL NO. 4439

A bill to amend 1936 (Ex Sess) PA 1, entitled

"Michigan employment security act,"

(MCL 421.1 to 421.75) by adding section 6h.

the people of the state of michigan enact:

Sec. 6h. (1) The director shall contract with an independent computer expert to do all of the following:

(a) Audit the source code of the unemployment agency computer systems.

(b) Audit the algorithms and logic formulas used by the unemployment agency computer systems to evaluate claims for unemployment benefits.

(c) Prepare a report as described in subsection (3).

(2) The director shall do both of the following:

(a) Coordinate with the developer of the unemployment agency computer systems to provide technical assistance necessary for the independent computer expert contracted with under subsection (1) to perform his or her duties under subsection (1), including, but not limited to, doing either or both of the following:

(i) Disclosing the source code of the unemployment agency computer systems to the independent computer expert.

(ii) Providing an employee of the developer with knowledge of the source code to assist the independent computer expert.

(b) Provide support necessary for the independent computer expert contracted with under subsection (1) to perform his or her duties under subsection (1), including, but not limited to, doing either or both of the following:

(i) Disclosing relevant data about unemployment benefit claims to the independent computer expert.

(ii) Providing employees or independent contractors of the unemployment agency who are experts in statistics or unemployment benefits to assist the independent computer expert.

(3) Not later than 8 months after the effective date of the amendatory act that added this section, and every 5 years after submitting the initial report, the independent computer expert contracted with under subsection (1) shall prepare and submit a report to the director, the speaker of the house of representatives, the senate majority leader, and the house and senate oversight committees that includes, at a minimum, all of the following information:

(a) A summary of the source code of the unemployment agency computer systems and the algorithms and logic formulas used by the unemployment agency computer systems to evaluate claims for unemployment benefits.

(b) An analysis of whether the source code of the unemployment agency computer systems and the algorithms and logic formulas used by the unemployment agency computer systems produce an accurate, effective, and fair evaluation of claims for unemployment benefits.

(c) Recommended changes, if any, to improve the accuracy, effectiveness, and fairness of the source code of the unemployment agency computer systems and the algorithms and logic formulas used by the unemployment agency computer systems.

(d) The data used by the independent computer expert to reach the conclusions described in subdivisions (b) and (c), including, but not limited to, all of the following information:

(i) The total number of claims determined by the unemployment agency computer systems.

(ii) The total number of claims denied by the unemployment agency computer systems and all of the following information related to the denials:

(A) The statutory basis for each denial.

(B) The total number of denials reversed by unemployment agency claims examiners.

(C) The total number of appeals heard by administrative law judges or the unemployment insurance appeals commission.

(D) The total number of denials reversed by administrative law judges or the unemployment insurance appeals commission.

(e) An analysis of the unemployment agency's confidence in the determinations made by the unemployment agency computer systems.

(4) If the unemployment agency computer systems do not have an open source license, the director shall negotiate with the developer of the unemployment agency computer systems to convert the unemployment agency computer systems to have an open source license. Any contract for the development of the unemployment agency computer systems made after the effective date of the amendatory act that added this section must require the unemployment agency computer systems to have an open source license.

(5) As used in this section: