BILL NUMBER: AB 1577 CHAPTERED 08/30/05 CHAPTER 152 FILED WITH SECRETARY OF STATE AUGUST 30, 2005 APPROVED BY GOVERNOR AUGUST 30, 2005 PASSED THE SENATE AUGUST 15, 2005 PASSED THE ASSEMBLY MAY 31, 2005 AMENDED IN ASSEMBLY MAY 12, 2005 AMENDED IN ASSEMBLY MAY 3, 2005 INTRODUCED BY Assembly Member Benoit FEBRUARY 22, 2005 An act to amend Sections 605, 634.5, 682, 684, 708, 708.5, 828, 1025, 1222, 1256.3, 1451, 2051, 2061, 2781, 3254.5, 9003, 9604, 9605, 9608, 9615, 9616.1, 10212.2, 11000, 11001, 11002, 11003, 11004, 13002, 13021, 15001, and 15005 of, to amend and renumber Sections 1256.5 and 1256.7 of, to repeal Sections 301.5, 1301, 1302, 1303, 1304, 1305, 1306, 1307, 1308, 9106, 10521, 10523, 10524, 10525, and 10527 of, to repeal Article 8.5 (commencing with Section 1150) of Chapter 4 of Part 1 of Division 1 of, to repeal Chapter 3 (commencing with Section 10000) and Chapter 6 (commencing with Section 11010) of Part 1 of Division 3 of, and to repeal Division 2 (commencing with Section 5000) and Division 4 (commencing with Section 12000) of, the Unemployment Insurance Code, relating to unemployment compensation. LEGISLATIVE COUNSEL'S DIGEST AB 1577, Benoit Unemployment insurance reform. (1) Existing law states the intent of the Legislature to ensure that job order information registered with the Job Service of the Employment Development Department be shared among the department's field offices and requires all of the department's offices within a common labor-market area, as defined, to share job listing information, as specified, and display signs containing specified information for job seekers to review. This bill would repeal the provisions requiring the department's offices within a common labor-market area to share job listing information and display specified signs, and would modify the provisions relating to legislative intent to state that job order information registered with the One-Stop Career Centers System shall be also shared among the department's field offices and one-stop career centers in the local labor market and throughout the state. (2) Existing law requires the department to administer all job training and placement programs and services for eligible persons, as defined, to establish necessary data systems for purposes of providing administrative information on specified persons, including progress report data for clients in the manpower training program, as specified, and to conduct and administer, among other things, the California Migrant Master Plan. This bill would delete the provisions requiring the department to submit progress report data, as provided, and to conduct and administer the California Migrant Master Plan. (3) Existing law requires the Employment Development Department to develop and administer an amnesty program for a 3-month period beginning on April 1, 1995, under which an employer is eligible to apply for the waiver of unpaid penalties, and interest owed on those penalties, imposed on or before June 30, 1993, that are owed as a result of the nonpayment or underpayment of these tax liabilities or the failure to file reports; or penalties imposed, or that may be imposed, and taxes required to be withheld, that are owed as a result of the nonreporting or underreporting of these tax liabilities or the failure to file reports for periods that ended on or before June 30, 1993. This bill would delete those obsolete provisions relating to that amnesty program. (4) Existing law provides for the establishment of a self-employment assistance program, administered by the Director of the Employment Development Department, and establishes the eligibility requirements that an individual must satisfy in order to qualify for the self-employment assistance program. Existing law terminates that program as of the week ending December 5, 1998. This bill would delete those obsolete provisions relating to the self-employment assistance program. (5) Existing law requires the department to coordinate various employment programs, including work incentive programs, and to implement a federal welfare-to-work grant program pursuant to the federal Balanced Budget Act of 1997. This bill would delete those provisions relating to the work incentive programs and the welfare-to-work grant program. (6) Existing law authorizes the State Job Training Coordinating Council to develop a comprehensive and coordinated employment and training programs and services plan in accordance with the federal Job Training Partnership Act, which imposes various requirements on states to provide local employment and training services for economically disadvantaged individuals and displaced workers as a condition of receipt of federal funds. Existing law defines "employment and training programs and services" to include specified programs and prescribes certain guidelines for developing the coordination and special services plan, as provided. This bill would delete those provisions relating to the guidelines for developing the coordination and special services plans, and the provisions relating to the definition of the phrase "employment and training programs and services." (7) Under existing law, the Secretary of the Health and Welfare Agency, the Secretary of the Trade and Commerce Agency, the Chancellor of the California Community Colleges, and the Superintendent of Public Instruction, in collaboration with state and regional, as well as local workforce education and training providers, are required to develop and maintain a state workforce development plan to create an integrated, high-quality workforce development system in order to prepare emerging, transitional, and current workers to be employed in the state's global economy. This bill would repeal those provisions relating to the Regional Work Force Preparation and Economic Development Act. (8) Existing law establishes a job training program and a career opportunities development program for welfare recipients and other disadvantaged persons administered by the State Personnel Board, and requires the board to ensure that a sum of no less than $1,000,000 be available to certain entities that develop jobs providing or leading to permanent employment for registrants of the Greater Avenues for Independence Act of 1985. This bill would repeal the provisions relating to the career opportunities development program. (9) This bill would also delete obsolete references, revise cross-references and make conforming and clarifying changes to the provisions relating to unemployment compensation, employment services programs and withholding tax on wages. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 301.5 of the Unemployment Insurance Code is repealed. SEC. 2. Section 605 of the Unemployment Insurance Code is amended to read: 605. (a) Except as provided by Section 634.5, "employment" for the purposes of this part and Parts 3 (commencing with Section 3501) and 4 (commencing with Section 4001) includes all service performed by an individual (including blind and otherwise disabled individuals) for any public entity or Indian tribe, if the service is excluded from "employment" under the federal Unemployment Tax Act solely by reason of paragraph (7) of Section 3306(c) of that act. (b) For purposes of this section: (1) "Public entity" means the State of California (including the Trustees of the California State University and Colleges, and the California Industries for the Blind), any instrumentality of this state (including the Regents of the University of California), any political subdivision of this state or any of its instrumentalities, a county, city, district (including the governing board of any school district or community college district, any county board of education, any county superintendent of schools, or any personnel commission of a school district or community college district that has a merit system pursuant to any provision of the Education Code), entities conducting fairs as identified in Sections 19418 to 19418.3, inclusive, of the Business and Professions Code, any public authority, public agency, or public corporation of this state, any instrumentality of more than one of the foregoing, and any instrumentality of any of the foregoing and one or more other states or political subdivisions. (2) "Indian tribe" means any Indian tribe described by subsection (u) of Section 3306 of Title 26 of the United States Code. SEC. 3. Section 634.5 of the Unemployment Insurance Code is amended to read: 634.5. Notwithstanding any other provision of law, no provision excluding service from "employment" shall apply to any entity defined by Section 605 or to any nonprofit organization described by Section 608, except as provided by this section. With respect to any entity defined by Section 605 or any nonprofit organization described by Section 608, "employment" does not include service excluded under Sections 629, 631, 635, and 639 to 648, inclusive, or service performed in any of the following: (a) In the employ of either of the following: (1) A church or convention or association of churches. (2) An organization which is operated primarily for religious purposes and which is operated, supervised, controlled, or principally supported by a church or convention or association of churches. (b) By a duly ordained, commissioned, or licensed minister of a church in the exercise of his or her ministry or by a member of a religious order in the exercise of duties required by the order. (c) In the employ of any entity defined by Section 605, if the service is performed by an individual in the exercise of his or her duties as any of the following: (1) An elected official. (2) A member of a legislative body or a member of the judiciary of a state or a political subdivision of a state. (3) A member of the tribal council of an Indian tribe as described by subsection (u) of Section 3306 of Title 26 of the United States Code. (4) A member of a State National Guard or Air National Guard. (5) An employee serving on a temporary basis in case of fire, storm, snow, earthquake, flood, or other similar emergency. (6) An employee in a position that, under or pursuant to state or tribal law, is designated as either of the following: (A) A major nontenured policymaking or advisory position. (B) A policymaking or advisory position, the performance of the duties of which ordinarily does not require more than eight hours per week. (7) (A) Except as otherwise provided in subparagraph (B), an election official or election worker if the amount of remuneration reasonably expected to be received by the individual during the calendar year for services as an election official or election worker is less than one thousand dollars ($1,000). (B) This paragraph shall not take effect unless and until the service is excluded from service to which paragraph (1) of subdivision (a) of Section 3309 of Title 26 of the United States Code applies by reason of exemption under subdivision (b) of Section 3309 of that act. (d) By an individual receiving rehabilitation or remunerative work in a facility conducted for the purpose of carrying out a program of either: (1) Rehabilitation for individuals whose earning capacity is impaired by age or physical or mental deficiency or injury. (2) Providing remunerative work for individuals who because of their impaired physical or mental capacity cannot be readily absorbed in the competitive labor market. (e) By an individual receiving work relief or work training as part of an unemployment work relief or work training program assisted or financed in whole or in part by any of the following: (1) A federal agency. (2) An agency of a state or a political subdivision thereof. (3) An Indian tribe, as described by subsection (u) of Section 3306 of Title 26 of the United States Code. (f) By a ward or an inmate of a custodial or penal institution pursuant to Article 1 (commencing with Section 2700), Article 4 (commencing with Section 2760), and Article 5 (commencing with Section 2780) of Chapter 5 of, and Article 1 (commencing with Section 2800) of Chapter 6 of, Title 1 of Part 3 of the Penal Code, Section 4649 and Chapter 1 (commencing with Section 4951) of Part 4 of Division 4 of the Public Resources Code, and Sections 883, 884, and 1768 of the Welfare and Institutions Code. (g) By an individual under the age of 18 years in the delivery or distribution of newspapers or shopping news, not including delivery or distribution to any point for subsequent delivery or distribution. (h) By an individual in the sale of newspapers or magazines to ultimate consumers, under an arrangement that includes the following conditions: (1) The newspapers or magazines are to be sold by the individual at a fixed price. (2) The individual's compensation is based on retention of the excess of the price over the amount at which the newspapers or magazines are charged to the individual, whether or not he or she is guaranteed a minimum amount of compensation for the service or is entitled to be credited with the unsold newspapers or magazines that he or she returns. (i) (1) Except as otherwise provided in paragraph (2), as a substitute employee whose employment does not increase the size of the employer's normal workforce, whose employment is required by law, and whose employment as a substitute employee does not occur on more than 60 days during the base period. (2) This subdivision shall not take effect unless and until the United States Secretary of Labor, or his or her designee, finds that this subdivision is in conformity with federal requirements. (j) As a participant in a national service program carried out using assistance provided under Section 12571 of Title 42 of the United States Code. SEC. 4. Section 682 of the Unemployment Insurance Code is amended to read: 682. (a) "Employer" also means any employing unit which employs individuals to perform domestic service in a private home, local college club, or local chapter of a college fraternity or sorority and pays wages in cash of one thousand dollars ($1,000) or more for such service during any calendar quarter in the calendar year or the preceding calendar year. (b) Any employing unit which qualifies as an employer under this section shall not be treated as an employer with respect to wages paid for any service other than domestic service specified by this section unless such employing unit also qualifies as an employer with respect to such other service under Section 675, 676, 677, or 678. SEC. 5. Section 684 of the Unemployment Insurance Code is amended to read: 684. (a) Solely for the purposes of Part 2 (commencing with Section 2601) of this division, "employer" also means any employing unit which employs individuals to perform domestic service in a private home, local college club, or local chapter of a college fraternity or sorority and pays wages in cash of seven hundred fifty dollars ($750) or more to individuals employed in such service during any calendar quarter in the calendar year or the preceding calendar year. (b) Any employing unit which qualifies as an employer under this section shall not be treated as an employer with respect to wages paid for any service other than domestic service specified by this section unless such employing unit also qualifies as an employer with respect to such other service under Section 675, 676, 677, or 678. SEC. 6. Section 708 of the Unemployment Insurance Code is amended to read: 708. (a) Any individual who is an employer under this division or any two or more individuals who have so qualified may file with the director a written election that their services shall be deemed to be services performed by individuals in employment for an employer for all the purposes of this division. Upon the approval of the election by the director, the services of those individuals shall be deemed to constitute employment for an employer for all of the purposes of this division. Regardless of their actual earnings, for the purposes of computing benefit rights and contributions under this division, they shall be deemed to have received the following remuneration for each calendar quarter: (1) For purposes of unemployment insurance, the highest amount of wages required to be entitled to the maximum benefit amount provided in Section 1280. (2) For purposes of disability insurance, the highest amount of wages required to be entitled to the maximum benefit amount provided in Section 2655. (A) For disability insurance contributions on or after July 1, 1994, the quarterly contribution shall be the product of one-fourth of the amount of net profit, but not less than one thousand one hundred fifty dollars ($1,150) except when subparagraph (B) applies, reported on or before April 15 of the preceding year as declared on the Internal Revenue Service Schedule SE filed by an individual who is an employer under this division and the contribution rate established pursuant to Section 984.5, except as provided by Section 985. On January 1, 1995, quarterly income credits for the period from July 1, 1993, to June 30, 1994, inclusive, shall be changed to one-fourth of the amount of the net profit or four thousand six hundred dollars ($4,600), whichever is greater, reported on or before April 15, 1993, as declared on the Internal Revenue Service Schedule SE for the 1992 taxable year filed by each individual having an elective coverage agreement in effect for that period or any portion thereof. If no Internal Revenue Service Schedule SE was filed, the individual shall be assigned a quarterly income credit of one thousand one hundred fifty dollars ($1,150). Quarterly income credits for this period shall not exceed seven thousand nine hundred forty-two dollars ($7,942). If any quarterly income credit for the period from July 1, 1993, to June 30, 1994, inclusive, was reduced prior to January 1, 1995, the amended income credit shall be reduced proportionately. Benefits payable for periods of disability commencing on or after January 1, 1995, shall be based on Section 2655. For purposes of this division, income credits shall be included in the term "wages." (B) The self-employed individual shall not pay contributions for periods of any disability, including periods for which some services are performed while disabled. The self-employed individual shall file a quarterly report of wages and certify as to the period of disability in order to maintain eligibility for elective disability insurance coverage and benefits. During periods of disability, the self-employed individual shall reduce his or her quarterly contributions by dividing the quarterly contribution amount by 91 to compute the daily contribution amount, and the daily contribution amount shall be multiplied by the number of days disabled to compute the amount by which the quarterly contributions shall be reduced. The department shall reduce income credits utilizing the same calculation method. (b) Any individual who is an employer under this division or any two or more individuals who have so qualified may file with the director a written election that their services shall be deemed to be services performed by individuals in employment for an employer for the purposes of Part 2 (commencing with Section 2601) only. Upon the approval of the election by the director, the services of those individuals shall be deemed to constitute employment for an employer for the purposes of Part 2 (commencing with Section 2601) only. Regardless of their actual earnings, for the purposes of computing disability benefit rights and worker contributions, they shall be deemed to have received remuneration for each calendar quarter the highest amount of wages required to be entitled to the maximum benefit award provided in Section 2655. For contributions on or after July 1, 1994, the quarterly contribution shall be the product of one-fourth of the amount of net profit, but not less than one thousand one hundred fifty dollars ($1,150), except when subparagraph (B) of paragraph (2) of subdivision (a) applies, reported on or before April 15 of the preceding year as declared on the Internal Revenue Service Schedule SE filed by an individual who is an employer under this division and the contribution rate established pursuant to Section 984.5, except as provided by Section 985. The quarterly contribution shall be reduced as set forth in subparagraph (B) of paragraph (2) of subdivision (a) if a disability occurred during the quarter for which payment is being made. On January 1, 1995, quarterly income credits for the period from July 1, 1993, to June 30, 1994, inclusive, shall be changed to one-fourth of the amount of the net profit or four thousand six hundred dollars ($4,600), whichever is greater, reported on or before April 15, 1993, as declared on the Internal Revenue Service Schedule SE for the 1992 taxable year filed by each individual having an elective coverage agreement in effect for that period or any portion thereof. If no Internal Revenue Service Schedule SE was filed, the individual shall be assigned a quarterly income credit of one thousand one hundred fifty dollars ($1,150). Quarterly income credits for this period shall not exceed seven thousand nine hundred forty-two dollars ($7,942). If quarterly income credits were reduced prior to January 1, 1995, the amended income credits shall be reduced proportionately. Benefits payable for periods of disability commencing on or after January 1, 1995, shall be based on Section 2655. For purposes of this division, income credits shall be included in the term "wages." (c) (1) Any individual applying for or continuing elective coverage under this section shall be requested to sign an annual statement authorizing the department to verify the net profit declared on his or her Internal Revenue Service Schedule SE. Failure of the individual to sign a statement authorizing the department to verify income shall result in the individual being assigned an annual income level of four thousand six hundred dollars ($4,600) for contribution and benefit purposes. (2) Any individual applying for elective coverage shall submit a copy of his or her Internal Revenue Service Schedule SE filed on or before April 15 of the preceding year with his or her application for elective coverage in order to establish first-year contributions and benefits in excess of the minimum required to qualify for elective coverage. (d) Any self-employed individual continuing elective coverage who fails to file an Internal Revenue Service Schedule SE by April 15 of each calendar year is required to remit contributions based upon the last year the self-employed individual filed an Internal Revenue Service Schedule SE. (e) Any self-employed individual who has not yet filed an Internal Revenue Service Schedule SE shall be assigned an annual income level of four thousand six hundred dollars ($4,600) for contribution and benefit purposes. (f) Contributions required under this division are payable on and after the date stated in the approval of the director. The director may levy assessments under this division for any amount due when an elective coverage agreement has been in effect for less than two complete calendar years. Chapter 7 (commencing with Section 1701), relating to the collection of amount due, shall apply to this section. (g) No benefits shall be paid to any individual based upon remuneration deemed to have been received pursuant to this section unless all contributions due with respect to all remuneration deemed to have been received by the individual pursuant to this section have been paid to the department. (h) No benefits shall be paid to any individual based on elective coverage income credits in his or her base period if his or her elective coverage agreement has been terminated under paragraph (6) of subdivision (a) of Section 704.1. (i) Notwithstanding subdivision (b) of Section 2627, no benefits shall be paid to any individual covered under this section, with respect to periods of disability commencing on or after January 1, 1994, until he or she has been unemployed and disabled for a waiting period of seven consecutive days during each disability benefit period. (j) Notwithstanding Section 2653, with respect to periods of disability commencing on or after January 1, 1994, the maximum amount of benefits payable to an individual covered under this section during any one disability benefit period shall be 39 times his or her weekly benefit amount, but in no case shall the total amount of benefits payable be more than the total wages credited to the individual during his or her disability base period. If the benefit is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1). (k) For purposes of this section, Internal Revenue Service Schedule SE is defined as Internal Revenue Service Form 1040 Schedule SE, or in the case of statutory employees under the Internal Revenue Code, it shall be defined as Internal Revenue Service Form 1040 Schedule C, or the California Income Tax Return, when accompanied by Internal Revenue Service Form W-2. SEC. 7. Section 708.5 of the Unemployment Insurance Code is amended to read: 708.5. (a) Any individual who is self-employed, who is not an employer as defined in any provision of Article 3 (commencing with Section 675), of Chapter 3 of this part, and who receives the major part of his or her remuneration from the trade, business, or occupation in which he or she is self-employed, may file with the director a written election that his or her services in connection with his or her trade, business, or occupation shall be deemed to be services performed by an individual in employment for an employer for the purposes of Part 2 (commencing with Section 2601) only. Upon the approval of the election by the director, the services of that self-employed individual in connection with his or her trade, business, or occupation shall be deemed to constitute employment for an employer for the purposes of Part 2 only of this division. Regardless of his or her actual earnings, for the purpose of computing disability benefit rights and worker contributions, he or she shall be deemed to have received remuneration for each calendar quarter the highest amount of wages required to be entitled to the maximum benefit award provided in Section 2655. For contributions on or after July 1, 1994, the quarterly contribution shall be the product of one-fourth of the amount of net profit, but not less than one thousand one hundred fifty dollars ($1,150), except when subparagraph (B) of paragraph (2) of subdivision (a) of Section 708 applies, reported on or before April 15 of the preceding year as declared on the Internal Revenue Service Schedule SE filed by an individual who is an employer under this division and the contribution rate established pursuant to Section 984.5, except as provided by Section 985. The quarterly contribution shall be reduced as set forth in subparagraph (B) of paragraph (2) of subdivision (a) of Section 708 if a disability occurred during the quarter for which payment is being made. On January 1, 1995, quarterly income credits for the period from July 1, 1993, to June 30, 1994, inclusive, shall be changed to one-fourth of the net profit or four thousand six hundred dollars ($4,600), whichever is greater, reported on or before April 15, 1993, as declared on the Internal Revenue Service Schedule SE for the 1992 taxable year filed by each individual having an elective coverage agreement in effect for that period or any portion thereof. If no Internal Revenue Service Schedule SE was filed, the individual shall be assigned a quarterly income credit of one thousand one hundred fifty dollars ($1,150). Quarterly income credits for this period shall not exceed seven thousand nine hundred forty-two dollars ($7,942). If quarterly income credits for the period from July 1, 1993, to June 30, 1994, inclusive, were reduced prior to January 1, 1995, the amended income credits shall be reduced proportionately. Benefits payable for periods of disability commencing on or after January 1, 1995, shall be based on the provisions of Section 2655. For purposes of this division, income credits shall be included in the term "wages." (b) (1) Any individual applying for or continuing elective coverage under this section shall be requested to sign an annual statement authorizing the department to verify the net profit declared on his or her Internal Revenue Service Schedule SE. Failure of the individual to sign a statement authorizing the department to verify income shall result in the individual being assigned an annual income level of four thousand six hundred dollars ($4,600) for contribution and benefit purposes. (2) Any individual applying for elective coverage shall submit a copy of his or her Internal Revenue Service Schedule SE filed on or before April 15 of the preceding year with his or her application for elective coverage in order to establish first-year contributions and benefits in excess of the minimum required to qualify for elective coverage. (c) Any self-employed individual continuing elective coverage who fails to file an Internal Revenue Service Schedule SE by April 15 of each calendar year is required to remit contributions based upon the last year the self-employed individual filed an Internal Revenue Service Schedule SE. (d) Any self-employed individual who has not yet filed an Internal Revenue Service Schedule SE shall be assigned an annual income level of four thousand six hundred dollars ($4,600) for contribution and benefit purposes. (e) Worker contributions required under this division are payable on and after the date stated in the approval of the director. The director may levy assessments under this division for any amount due when an elective coverage agreement has been in effect for less than two complete calendar years. Chapter 7 (commencing with Section 1701), relating to the collection of amounts due, shall apply to this section. (f) No benefits shall be paid to any individual based on elective coverage income credits in his or her base period if his or her elective coverage agreement has been terminated under paragraph (6) of subdivision (a) of Section 704.1. (g) No benefits shall be paid to any individual based upon remuneration deemed to have been received pursuant to this section unless all contributions due with respect to all remuneration deemed to have been received by that individual pursuant to this section have been paid to the department. (h) Notwithstanding subdivision (b) of Section 2627, no benefits shall be paid to any individual covered under this section, with respect to periods of disability commencing on or after January 1, 1994, until he or she has been unemployed and disabled for a waiting period of seven consecutive days during each disability benefit period. (i) Notwithstanding Section 2653, with respect to periods of disability commencing on or after January 1, 1994, the maximum amount of benefits payable to an individual covered under this section during any one disability benefit period shall be 39 times his or her weekly benefit amount, but in no case shall the total amount of benefits payable be more than the total wages credited to the individual during his or her disability base period. If the benefit is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1). (j) For purposes of this section, Internal Revenue Service Schedule SE is defined as Internal Revenue Service Form 1040 Schedule SE, or in the case of statutory employees under the Internal Revenue Code, it shall be defined as Internal Revenue Service Form 1040 Schedule C, or the California Income Tax Return, when accompanied by Internal Revenue Service Form W-2. SEC. 8. Section 828 of the Unemployment Insurance Code is amended to read: 828. Each school employer shall be responsible for a quarterly local experience charge as set forth below, together with the charges or penalties set by the administrator for administrative indiscretions, including tardiness and error, as well as all costs for benefits and administration resulting from failure to properly cover an employee. The reimbursement for charges shall be delinquent 30 days from the date of notice and if not paid within the time required, the school employer shall pay a penalty of 10 percent of the unpaid amount, plus interest at the adjusted annual rate established pursuant to Section 19521 of the Revenue and Taxation Code from and after the date of delinquency until paid. The local experience charge to be levied against each school employer shall be computed as follows: Local Experience Charge (a) The local experience charge rate shall be 10 percent for the first three complete fiscal years of participation in the School Employees Fund. (b) The local experience charge rate for the fourth fiscal year, and each succeeding fiscal year, shall be determined by dividing the reserve balance at the end of the fiscal year which began 24 months prior to the fiscal year for which the rate is being calculated by the benefits paid for that same prior fiscal year. The factor derived is the employer's reserve ratio. If, as of the computation date, the school employer's reserve ratio equals or exceeds that which appears on any line in column 1 of the following table, but is less than that which appears in column 2 of that table, the local experience charge rate shall be the figure appearing on that same line in column 3 of that table. (Column 1) (Column 2) (Column 3) Line Reserve Ratio Rate 1.......negative to 1.00 15% 2...........1.00 to 2.00 10% 3...........2.00 to 3.00 5% 4...........3.00 or more 0% (c) The rate determined in subdivision (a) or (b) shall be multiplied by the employer's quarterly benefit charges to compute the local experience charges. The administrator shall, not later than March 31 of each year, notify each school employer participating in the School Employees Fund of their local experience charge rate for the succeeding fiscal year. SEC. 9. Section 1025 of the Unemployment Insurance Code is amended to read: 1025. The director shall keep separate records of the amounts paid into the fund by each employer in his or her own behalf, or chargeable to him or her as benefits; but nothing in this division shall be construed to grant any employer or his or her employees prior claims or rights to the amount contributed by him or her to the fund, either on his or her own account or on behalf of his or her employees. The amount of employer contributions, advances, or reimbursements under Article 5 (commencing with Section 801) of Chapter 3 of this part or Section 821, and all other amounts payable to the fund, shall be pooled and available to pay unemployment compensation benefits to any employee entitled thereto, regardless of the source of contributions or any other amounts. SEC. 10. Article 8.5 (commencing with Section 1150) of Chapter 4 of Part 1 of Division 1 of the Unemployment Insurance Code is repealed. SEC. 11. Section 1222 of the Unemployment Insurance Code is amended to read: 1222. Within 30 days of service of any notice of assessment or denial of claim for refund or credit under Sections 803, 821, or 991, or of any notice under Sections 704.1, 1035, 1055, 1127.5, 1131, 1142, 1143, 1144, 1180, 1184, 1733, and 1735, any employing unit or other person given the notice, or any employing unit affected by a granting or denial of a transfer of reserve account, may file a petition for review or reassessment with an administrative law judge. The administrative law judge may for good cause grant an additional 30 days for the filing of a petition. If a petition for reassessment is not filed within the 30-day period, or within the additional period granted by the administrative law judge, an assessment is final at the expiration of the period. If a petition for review of a termination of elective coverage under Section 704.1 is not filed within the 30-day period, or within the additional period granted by the administrative law judge, the termination is final at the expiration of the period. If the director fails to serve notice of his or her action within 60 days after a claim for refund or credit is filed, the person or employing unit may consider the claim denied and file a petition with an administrative law judge. SEC. 12. Section 1256.3 of the Unemployment Insurance Code is amended to read: 1256.3. For the purposes of Sections 1256, 1256.1, 1256.2, 1256.4, and 1256.5, "most recent work" is that work in which a claimant last performed compensated services: (a) Prior to and nearest the date of filing a valid new, reopened, or additional claim for unemployment compensation benefits, a valid primary, reopened, or additional claim for extended duration benefits, or a valid application, or reopened or additional claim for federal-state extended benefits. (b) During the calendar week for which a continued claim is filed. SEC. 13. Section 1256.5 of the Unemployment Insurance Code is amended and renumbered to read: 1256.4. (a) An individual is disqualified for unemployment compensation benefits if either of the following occur: (1) The director finds that he or she was discharged from his or her most recent work for chronic absenteeism due to intoxication or reporting to work while intoxicated or using intoxicants on the job, or gross neglect of duty while intoxicated, when any of these incidents is caused by an irresistible compulsion to use or consume intoxicants, including alcoholic beverages. (2) He or she otherwise left his or her most recent employment for reasons caused by an irresistible compulsion to use or consume intoxicants, including alcoholic beverages. (b) An individual disqualified under this section, under a determination transmitted to him or her by the department, is ineligible to receive unemployment compensation benefits under this part for the week in which the separation occurs, and continuing until he or she has performed service in bona fide employment for which remuneration is received equal to or in excess of five times his or her weekly benefit amount, or until a physician or authorized treatment program administrator certifies that the individual has entered into and is continuing in, or has completed, a treatment program for his or her condition and is able to return to employment. (c) The department shall advise each individual disqualified under this section of the benefits available under Part 2 (commencing with Section 2601), and, if assistance in locating an appropriate treatment program is requested, refer the individual to the appropriate county drug or alcohol program administrator. SEC. 14. Section 1256.7 of the Unemployment Insurance Code is amended and renumbered to read: 1256.5. An individual shall be deemed to have left his or her most recent work with good cause if the director finds that he or she leaves employment because of sexual harassment, provided the individual has taken reasonable steps to preserve the working relationship. No steps shall be required if the director finds it would have been futile. For purposes of this subdivision, unwelcome sexual advances, requests for sexual favors, and other verbal, visual, or physical conduct of a sexual nature constitutes sexual harassment when any of the following occur: (1) Submission to the conduct is made either explicitly or implicitly a term or condition of an individual's employment. (2) Submission to or rejection of the conduct by an individual is used as the basis for employment decisions affecting the individual. (3) The conduct has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile, or offensive working environment. Findings of fact and law by the director shall not collaterally estop adjudication of the issue of sexual harassment in another forum. SEC. 15. Section 1301 of the Unemployment Insurance Code is repealed. SEC. 16. Section 1302 of the Unemployment Insurance Code is repealed. SEC. 17. Section 1303 of the Unemployment Insurance Code is repealed. SEC. 18. Section 1304 of the Unemployment Insurance Code is repealed. SEC. 19. Section 1305 of the Unemployment Insurance Code is repealed. SEC. 20. Section 1306 of the Unemployment Insurance Code is repealed. SEC. 21. Section 1307 of the Unemployment Insurance Code is repealed. SEC. 22. Section 1308 of the Unemployment Insurance Code is repealed. SEC. 23. Section 1451 of the Unemployment Insurance Code is amended to read: 1451. Nonprofessional employees of the Fremont and Riverside campuses of the California School for the Deaf, the Fremont campus of the California School for the Blind, and the diagnostic schools for individuals with neurological disabilities located in Los Angeles, San Francisco, and Fresno, shall be eligible for benefits provided by this chapter, on the same terms and conditions as are specified by this part, Part 3 (commencing with Section 3501), and Part 4 (commencing with Section 4001), for all other individuals, except where inconsistent with the provisions of this chapter. Except where inconsistent with the provisions of this chapter, the provisions of this division and authorized regulations shall apply to any matter arising pursuant to this chapter. SEC. 24. Section 2051 of the Unemployment Insurance Code is amended to read: 2051. The State of California accepts the provisions of the Wagner-Peyser Act, approved June 6, 1933, as amended by the Workforce Investment Act of 1998 (Public Law 105-220) passed by the Congress of the United States, and entitled "An act to provide for the establishment of a national employment system and for cooperation with the states in the promotion of the system, and for other purposes," in conformity with Section 4 thereof, and will observe and comply with the requirements of that act. The department is the agency of this state for the purposes of that act. SEC. 25. Section 2061 of the Unemployment Insurance Code is amended to read: 2061. It is the intent of the Legislature in adopting this section to ensure that job order information registered with the Job Service of the Employment Development Department and the One-Stop Career Centers System be shared as expeditiously and thoroughly as possible between the department's field offices and one-stop career centers both in the local labor market and throughout the state. The Legislature finds that job order sharing will result in better service to employers and more efficient service to job seekers. The provisions of this section shall be subject to the limitations of federal budgetary constraints. SEC. 26. Section 2781 of the Unemployment Insurance Code is amended to read: 2781. Except as provided in this chapter and Chapter 2.5 (commencing with Section 19878) of Part 2.6 of Division 5 of Title 2 of the Government Code, a state employee shall be eligible for nonindustrial disability benefits on the same terms and conditions as are specified by this part. Except as inconsistent with the provisions of this chapter and Chapter 2.6 (commencing with Section 19878) of Part 2.6 of Division 5 of Title 2 of the Government Code, the provisions of this division and authorized regulations shall apply to any matter arising pursuant to this chapter. SEC. 27. Section 3254.5 of the Unemployment Insurance Code is amended to read: 3254.5. A voluntary plan in force and effect at the time a successor employing unit acquires the organization, trade, or business, or substantially all the assets thereof, or a distinct and severable portion of the organization, trade, or business, and continues its operation without substantial reduction of personnel resulting from the acquisition, shall not withdraw without specific request for withdrawal thereof. The successor employing unit and the insurer shall be deemed to have consented to the provisions of the plan unless written request for withdrawal, effective as of the date of acquisition, is transmitted to the Director of Employment Development, by the employer or the insurer, within 30 days after the acquisition date, or within 30 days after notification from the Director of Employment Development that the plan is to continue, whichever is later. Unless the plan is withdrawn as of the date of acquisition by the successor employer or the insurer, a written request for withdrawal shall be effective only on the anniversary of the effective date of the plan next occurring on or after the date of acquisition, except that the plan may be withdrawn on the operative date of any law increasing the benefit amounts provided by Sections 2653 and 2655 or the operative date of any change in the rate of worker contributions as determined by Section 984, if notice of the withdrawal of the plan is transmitted to the Director of Employment Development not less than 30 days prior to the operative date of law or change. If the plan is not withdrawn on 30 days' notice because of the enactment of a law increasing benefits or because of a change in the rate of worker contributions as determined by Section 984, the plan shall be amended to conform to increase or change on the operative date of the increase or change. Promptly upon notice of change in ownership any insurer of a plan shall prepare and issue policy forms and amendments as required, unless the plan is withdrawn. Nothing herein contained shall prevent future withdrawal of any plans on an anniversary of the effective date of the plan upon 30 days' notice, except that the plan may be withdrawn on the operative date of any law increasing the benefit amounts provided by Sections 2653 and 2655 or the operative date of any change in the rate of worker contributions as determined by Section 984, if notice of the withdrawal of the plan is transmitted to the Director of Employment Development not less than 30 days prior to the operative date of law or change. If the plan is not withdrawn on 30 days' notice because of the enactment of a law increasing benefits or because of a change in the rate of worker contributions as determined by Section 984, the plan shall be amended to conform to increase or change on the operative date of the increase or change. SEC. 28. Division 2 (commencing with Section 5000) of the Unemployment Insurance Code is repealed. SEC. 29. Section 9003 of the Unemployment Insurance Code is amended to read: 9003. Notwithstanding any other provisions of this code, individuals with disabilities who are clients of the Department of Rehabilitation shall not be barred as participants in manpower programs, including, but not limited to, retraining programs, work incentive programs, job training and placement programs, career opportunity development programs, and vocational educational programs, because of their mental or physical disability when certified by the Department of Rehabilitation as being potentially employable. SEC. 30. Section 9106 of the Unemployment Insurance Code is repealed. SEC. 31. Section 9604 of the Unemployment Insurance Code is amended to read: 9604. (a) The department shall establish necessary data systems which shall provide administrative information on persons served including, but not limited to, the following information: (1) Pertinent data on the characteristics of persons served. (2) The services provided. (3) The results of services provided. (b) The department shall also compile annually a report for the state and its principal labor market areas. The report shall contain information on the characteristics of the unemployed and analyses of current trends and projections for population, labor force, employment, and unemployment and shall be provided on a regular basis to cooperative area manpower systems councils or successors. SEC. 32. Section 9605 of the Unemployment Insurance Code is amended to read: 9605. The department shall: (a) Conduct the state manpower program, with the exception of manpower programs conducted by units of local general purpose government. (b) Be the sole state agency to approve and coordinate publicly funded job training and placement programs, which it administers. The department shall approve programs only if consistent with the plans developed under Section 9600 and other provisions of this division. (c) Be responsible for developing program objectives for each category of the service program it administers, establishing cost-effective results measurement, and providing accountability for results as related to the objectives set. (d) Appoint an advisory committee of representatives of employers and employer organizations to enlist the advice and support of private industry in developing a statewide system for making jobs available to job trainees following successful completion of job training and placement programs. (e) Develop controls to insure that job training and placement programs, it administers meet existing labor market needs as viewed by employers. The department shall study training and personnel selection methods used successfully by private industry. (f) Encourage placement of eligible persons in public employment with the assistance of an advisory group representing state and local officials and representatives of economically disadvantaged areas appointed by the department. (g) Evaluate the need for specific new public employment opportunities. (h) Determine the kinds and quality of job training and placement programs, it administers necessary to provide placement in public employment for eligible persons and develop means to realign job tasks to develop greater employment opportunities for eligible persons. (i) Cooperate with the State Personnel Board and local personnel officials in developing and upgrading employment opportunities for and in eliminating unnecessary barriers to the placement of eligible persons in public employment. The State Personnel Board and other state and local agencies shall cooperate to the maximum extent feasible to achieve the purposes of this division. SEC. 33. Section 9608 of the Unemployment Insurance Code is amended to read: 9608. The director shall, within each community employment development center, establish an intake system to appraise the individual needs of applicants. Each community employment development center shall provide the following services: (a) Job referral and labor market information services to applicants who are occupationally competitive and qualified by training or experience in the labor market. These applicants shall be encouraged to utilize self-help services. (b) Employment exploration and job development services to applicants who are employable but need some directed assistance in planning an effective job search or coping with minor barriers to employment. Employment exploration and job development services are designed: (1) To prepare groups of applicants to use job referral and information services by instructing them in job finding techniques and how to initiate their own job search. (2) To assist applicants directly by developing job opportunities. (3) To provide, as necessary, usually on a one-time basis, the following services: (A) Contacting an employer to explain an applicant's qualifications or limitations, such as a disability not affecting ability to work, in relation to requirements for a particular job and arranging an interview. (B) A more thorough appraisal of the applicant's capabilities and desires in relation to the job market than is required of an applicant seeking only job referral and labor market information. (4) To arrange for short-term supplemental services. (c) Individual employability development and placement services to applicants who are potentially employable but are in need of more intensive services before becoming employable because they are have vocational barriers due to disability, lack of skills, obsolescence of job skills, limited education, or poor work habits and attitudes. Intensive employability services shall be provided by case-responsible persons to applicants where case-responsible persons are assigned. (d) Through case managers or case-responsible persons, case services to applicants to the extent funds are available. Case services funds may be made available for services to the disadvantaged. "Case services" means an applicant's expenses necessary for or incident to training or employability development and includes, but is not limited to, the following: (1) Medical and dental treatment necessary for employability. (2) Temporary child care. (3) Transportation costs. (4) Wearing apparel. (5) Books and supplies. (6) Tools and safety equipment. (7) Union fees. (8) Business license fees. SEC. 34. Section 9615 of the Unemployment Insurance Code is amended to read: 9615. Eligible persons who are registrants pursuant to Article 3.2 (commencing with Section 11320) of Chapter 2 of Part 3 of Division 9 of the Welfare and Institutions Code shall receive priority for services. The department shall use up to 50 percent of the funds available to it pursuant to Section 7(b) of the federal Wagner-Peyser Act (29 U.S.C. Sec. 49f) to provide for job services required pursuant to subdivision (c) of Section 11320.3 of the Welfare and Institutions Code. SEC. 35. Section 9616.1 of the Unemployment Insurance Code is amended to read: 9616.1. (a) The department shall convene groups that represent local department field offices, county welfare departments, local workforce investment areas, and community colleges for the purpose of developing a local plan on how these entities will regularly coordinate employer outreach activities and the solicitation of entry-level and other job listings, in order to reduce duplication of effort and to enhance the overall job development activities. Each local plan shall be signed by the local entities convened pursuant to this subdivision and submitted to the department. (b) The entities involved in formulating each local plan and the department shall review each plan on at least an annual basis. SEC. 36. Chapter 3 (commencing with Section 10000) of Part 1 of Division 3 of the Unemployment Insurance Code is repealed. SEC. 37. Section 10212.2 of the Unemployment Insurance Code is amended to read: 10212.2. (a) The panel shall prepare a budget covering necessary administrative costs of the panel. The budget shall not be subject to change by the director except as agreed to by the panel. In the event that agreement cannot be reached, the Secretary of the Labor and Workforce Development Agency shall attempt to reach a mutual agreement. In the event a mutual agreement cannot be reached, the final decision shall rest with the Governor. (b) The director shall furnish at the request of the panel equipment, supplies, and housing unless specified otherwise in this code, and nonpersonal and housekeeping services required by the panel and shall perform any other mechanics of administration as the panel and the director may agree upon. SEC. 38. Section 10521 of the Unemployment Insurance Code is repealed. SEC. 39. Section 10523 of the Unemployment Insurance Code is repealed. SEC. 40. Section 10524 of the Unemployment Insurance Code is repealed. SEC. 41. Section 10525 of the Unemployment Insurance Code is repealed. SEC. 42. Section 10527 of the Unemployment Insurance Code is repealed. SEC. 43. Section 11000 of the Unemployment Insurance Code is amended to read: 11000. The Legislature finds that over 1.5 million persons in California are deaf or suffer from significant hearing impairment. Private and public employment agencies are not routinely adapted to meet the communication needs of persons who are deaf and hard of hearing and, therefore, the services they receive may be less than those provided to other persons. The Legislature also finds that employment opportunities for persons who are deaf and hard of hearing are increased when specialized counseling, interpretive, job placement, and followup services supplement conventional employment services. In addition, the limited programs which provide these specialized employment services to persons who are deaf and hard of hearing have recently been subject to significant local funding reductions. Therefore, the Legislature finds that a more stable funding source, as provided by this chapter, is necessary to ensure the continuance of these programs. SEC. 44. Section 11001 of the Unemployment Insurance Code is amended to read: 11001. (a) The department shall contract with public agencies or private nonprofit corporations for a period not to exceed one year to provide employment services for persons who are deaf and hard of hearing. These employment services shall be provided onsite at the department's offices which are selected pursuant to Section 11004. (b) At the end of each contract year, the department may renegotiate the terms of each contract in accordance with allowable increases or decreases in the contractor's costs and the contractor's demonstrated ability to provide the specified services. (c) If a contractor is a private nonprofit corporation, it shall submit a complete financial statement audited by a certified public accountant prior to a renewal of the contract. SEC. 45. Section 11002 of the Unemployment Insurance Code is amended to read: 11002. Employment services for persons who are deaf and hard of hearing shall include, but not be limited to, the following: (a) Complete communication services for all preparatory, job placement, and followup activities. The communication services shall include interpreter services by a professional interpreter for persons who are deaf and hard of hearing possessing the comprehensive skills certification of the National Registry of Interpreters for the Deaf or the equivalent, telecommunications, and, when necessary, training in communication skills. (b) Advocacy to assure that persons who are deaf and hard of hearing receive equal access to public and private employment services. (c) Job development and job placement. (d) Employment counseling, including peer counseling by persons who are deaf and hard of hearing. (e) Followup counseling and problemsolving after placement. SEC. 46. Section 11003 of the Unemployment Insurance Code is amended to read: 11003. (a) The department, with the advice of persons knowledgeable about providing employment services to persons who are deaf and hard of hearing, shall establish the criteria for choosing contractors. (b) The criteria shall include, but not be limited to, all of the following: (1) The ability to provide services to a person who is deaf or hard of hearing in the person's preferred mode of communication. (2) The ability to secure community support, including written endorsements of local officials, employers, the workforce investment board of the local workforce investment area and organizations of and for persons who are deaf and hearing impaired. (3) The existence of funding from one or more public or private sources. (c) Preference shall be given in the selection of a contractor to those proposals which demonstrate all of the following: (1) Participation of persons who are deaf and hard of hearing on the potential contractor's employment services staff, and in the case of a private nonprofit corporation, on the board of directors. (2) A commitment to the development and maintenance of self-determination for persons who are deaf and hard of hearing. SEC. 47. Section 11004 of the Unemployment Insurance Code is amended to read: 11004. The department shall do all of the following: (a) Determine the number and location of its offices within the state providing employment services to individuals who are deaf and hard of hearing and shall decide which offices shall be served by contractors given the resources available under this chapter. The department shall give priority to offices where contracts are necessary in order to prevent or minimize the disruption or the discontinuance of employment services to individuals who are deaf and hard of hearing which have been provided in conjunction with the department prior to July 1, 1984. (b) Coordinate the provision of employment services for individuals who are deaf and hard of hearing with the State Department of Social Services and the Department of Rehabilitation so that employment services provided by this chapter supplement or provide alternatives to services provided or funded by the departments. (c) Establish uniform accounting procedures and contracts for use with regard to this chapter. (d) Promulgate requests for proposals and conduct bidders' conferences, and evaluate proposals according to the criteria established pursuant to Section 11003. (e) Utilize the definitions of deafness and significant hearing impairment which have been used or established by regulation by the State Department of Social Services. (f) Conduct a management or fiscal audit of any contract whenever it is necessary for proper supervision of that contract. (g) Annually consider incorporation of the services described in this chapter in the job service plan required by Section 8 of the federal Wagner-Peyser Act (29 U.S.C. Sec. 49g). (h) Assist contractors in maintaining all of the following information: (1) The number of persons receiving services. (2) A description of the services provided. (3) The cost of the services provided. (4) The number of persons placed in jobs. (5) The number of persons assisted by followup activities. (6) The number and qualifications of staff providing the services. SEC. 48. Chapter 6 (commencing with Section 11010) of Part 1 of Division 3 of the Unemployment Insurance Code is repealed. SEC. 49. Division 4 (commencing with Section 12000) of the Unemployment Insurance Code is repealed. SEC. 50. Section 13002 of the Unemployment Insurance Code is amended to read: 13002. The following provisions of this code shall apply to any amount required to be deducted, reported, and paid to the department under this division: (1) Sections 301, 305, 306, 310, 311, 312, 317, and 318, relating to general administrative powers of the department. (2) Sections 403 to 413, inclusive, Section 1336, and Chapter 8 (commencing with Section 1951) of Part 1 of Division 1, relating to appeals and hearing procedures. (3) Sections 1110.6, 1111, 1111.5, 1112, 1113, 1113.1, 1114, 1115, 1116, and 1117 relating to the making of returns or the payment of reported contributions. (4) Article 8 (commencing with Section 1126) of Chapter 4 of Part 1 of Division 1, relating to assessments. (5) Article 9 (commencing with Section 1176), except Section 1176, of Chapter 4 of Part 1 of Division 1, relating to refunds and overpayments. (6) Article 10 (commencing with Section 1206) of Chapter 4 of Part 1 of Division 1, relating to notice. (7) Article 11 (commencing with Section 1221) of Chapter 4 of Part 1 of Division 1, relating to administrative appellate review. (8) Article 12 (commencing with Section 1241) of Chapter 4 of Part 1 of Division 1, relating to judicial review. (9) Chapter 7 (commencing with Section 1701) of Part 1 of Division 1, relating to collections. (10) Chapter 10 (commencing with Section 2101) of Part 1 of Division 1, relating to violations. SEC. 51. Section 13021 of the Unemployment Insurance Code is amended to read: 13021. (a) Every employer required to withhold any tax under Section 13020 shall for each calendar quarter, whether or not wages or payments are paid in the quarter, file a withholding report and a report of wages in a form prescribed by the department, and pay over the taxes so required to be withheld. The report of wages shall include individual amounts required to be withheld under Section 13020 or withheld under Section 13028. Except as provided in subdivisions (c) and (d) of this section, the employer shall file a withholding report and remit the total amount of income taxes withheld during the calendar quarter on or before the last day of the month following the close of the calendar quarter. (b) Every employer electing to file a single annual return under subdivision (d) of Section 1110 shall report and pay any taxes withheld under Section 13020 on an annual basis within the time specified in subdivision (d) of Section 1110. (c) (1) Effective January 1, 1995, whenever an employer is required, for federal income tax purposes, to remit the total amount of withheld federal income tax in accordance with Section 6302 of the Internal Revenue Code and regulations thereunder, and the accumulated amount of state income tax withheld is more than five hundred dollars ($500), the employer shall remit the total amount of income tax withheld for state income tax purposes within the number of banking days as specified for withheld federal income taxes by Section 6302 of the Internal Revenue Code, and regulations thereunder. (2) Effective January 1, 1996, the five hundred dollar ($500) amount referred to in paragraph (1) shall be adjusted annually as follows, based on the annual average rate of interest earned on the Pooled Money Investment Fund as of June 30 in the prior fiscal year: Average Rate of Interest Greater than or equal to 9 percent: $ 75 Less than 9 percent, but greater than or equal to 250 7 percent: Less than 7 percent, but greater than or equal to 400 4 percent: Less than 4 percent: 500 (d) (1) Notwithstanding subdivisions (a) and (c), for calendar years beginning prior to January 1, 1995, if in the 12-month period ending June 30 of the prior year the cumulative average payment made pursuant to this division or Section 1110, for eight-monthly periods, as defined under Section 6302 of the Internal Revenue Code and regulations thereunder, was fifty thousand dollars ($50,000) or more, the employer shall remit the total amount of income tax withheld within three banking days following the close of each eight-monthly period, as defined by Section 6302 of the Internal Revenue Code and regulations thereunder. For purposes of this subdivision, payment shall be made by electronic funds transfer in accordance with Section 13021.5, for one calendar year beginning on January 1. Payment is deemed complete on the date the electronic funds transfer is initiated, if settlement to the state's demand account occurs on or before the banking day following the date the transfer is initiated. If settlement to the state's demand account does not occur on or before the banking day following the date the transfer is initiated, payment is deemed complete on the date settlement occurs. The department shall, on or before October 31 of the prior year, notify all employers required to make payment by electronic funds transfer of these requirements. (2) Notwithstanding subdivisions (a) and (c), for calendar years beginning on or after January 1, 1995, if in the 12-month period ending June 30 of the prior year, the cumulative average payment made pursuant to this division or Section 1110 for any deposit periods, as defined under Section 6302 of the Internal Revenue Code and regulations thereunder, was twenty thousand dollars ($20,000) or more, the employer shall remit the total amount of income tax withheld within the number of banking days as specified for federal income taxes by Section 6302 of the Internal Revenue Code and regulations thereunder. For purposes of this subdivision, payment shall be made by electronic funds transfer in accordance with Section 13021.5, for one calendar year beginning on January 1. Payment is deemed complete on the date the electronic funds transfer is initiated, if settlement to the state's demand account occurs on or before the banking day following the date the transfer is initiated. If settlement to the state's demand account does not occur on or before the banking day following the date the transfer is initiated, payment is deemed complete on the date settlement occurs. The department shall, on or before October 31 of the prior year, notify all employers required by this paragraph to make payments by electronic funds transfer of these requirements. (3) Notwithstanding paragraph (2), effective January 1, 1995, electronic funds transfer payments that are subject to the one-day deposit rule, as defined by Section 6302 of the Internal Revenue Code and regulations thereunder, shall be deemed timely if the payment settles to the state's demand account within three banking days after the date the employer meets the threshold for the one-day deposit rule. (4) Any taxpayer required to remit payments pursuant to paragraphs (1) and (2) may request from the department a waiver of those requirements. The department may grant a waiver only if it determines that the particular amounts paid in excess of fifty thousand dollars ($50,000) or twenty thousand dollars ($20,000), as stated in paragraphs (1) and (2), respectively, were the result of an unprecedented occurrence for that employer, and were not representative of the employer's cumulative average payment in prior years. (5) Any state agency required to remit payments pursuant to paragraphs (1) and (2) may request a waiver of those requirements from the department. The department may grant a waiver if it determines that there will not be a negative impact on the interest earnings of the General Fund. If there is a negative impact to the General Fund, the department may grant a waiver if the requesting state agency follows procedures designated by the department to mitigate the impact to the General Fund. (e) Any employer not required to make payment pursuant to subdivision (d) of this section may elect to make payment by electronic funds transfer in accordance with Section 13021.5 under the following conditions: (1) The election shall be made in a form, and shall contain information, as prescribed by the director, and shall be subject to approval by the department. (2) If approved, the election shall be effective on the date specified in the notification to the employer of approval. (3) The election shall be operative from the date specified in the notification of approval, and shall continue in effect until terminated by the employer or the department. (4) Funds remitted by electronic funds transfer pursuant to this subdivision shall be deemed complete in accordance with subdivision (d) or as deemed appropriate by the director to encourage use of this payment method. (f) Notwithstanding Section 1112, no interest or penalties shall be assessed against any employer who remits at least 95 percent of the amount required by subdivision (c) or (d), provided that the failure to remit the full amount is not willful and any remaining amount due is paid with the next payment. The director may allow any employer to submit the amounts due from multiple locations upon a showing that those submissions are necessary to comply with the provisions of subdivision (c) or (d). (g) The department may, if it believes that action is necessary, require any employer to make the report required by this section and pay to it the tax deducted and withheld at any time, or from time to time but no less frequently than provided for in subdivision (a). (h) Any employer required to withhold any tax and who is not required to make payment under subdivision (c) shall remit the total amount of income tax withheld during each month of each calendar quarter, on or before the 15th day of the subsequent month if the income tax withheld for any of the three months or, cumulatively for two or more months, is three hundred fifty dollars ($350) or more. (i) For purposes of subdivisions (a), (c), and (h), payment is deemed complete when it is placed in a properly addressed envelope, bearing the correct postage, and it is deposited in the United States mail. (j) In addition to the withholding report and report of wages described in subdivision (a), each employer shall file with the director an annual reconciliation return showing the amount required to be withheld under Section 13020, and any other information the director shall prescribe. This annual reconciliation return shall be due on the first day of January following the close of the prior calendar year and shall become delinquent if not filed on or before the last day of that month. SEC. 52. Section 15001 of the Unemployment Insurance Code is amended to read: 15001. It is the purpose of this division to establish a program of job preparation, training, and placement services which enable economically disadvantaged persons to participate fully in the mainstream of our economy and thereby promote the economic security of families they now head or will in the future head, and which carries out the objectives, purposes and provisions of the Temporary Assistance for Needy Families (TANF) program established pursuant to Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code. To achieve these purposes, it is the intent of the Legislature that a service system be implemented which incorporates the following elements: (a) Integration of benefits and services under the Aid to Families with Dependent Children program with employment services, including the following: (1) Application and screening of eligible participants. (2) Assessment of each participant's employment potential and training needs. (3) Immediate job search assistance and imparting of self-help job search skills for employment in unsubsidized jobs. (4) Placement in appropriate training programs for those participants not otherwise job-ready. (b) Integration of those state and federal job training programs now authorized by law and designed to serve persons eligible under this division. (c) Overall program direction by the department whose functions under this division shall include: (1) Overall direction, under the policies established by the State Job Training Coordinating Council, of the statewide programs administered in service delivery areas under this division, including establishment of basic program standards consistent with the provisions of this division and the provisions of Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code, review of service delivery area plans, allocation and distribution to grant recipients selected within service delivery areas of funds from the block grant established pursuant to Chapter 8 (commencing with Section 15080), and assessment of service delivery area performance based on standards that measure results rather than process. (2) Administration, either directly or by contract with another entity, of these statewide programs in service delivery areas that request the state to assume this function. (3) Administration of demonstration programs testing innovative approaches to assisting clients eligible under this division to find unsubsidized employment. (4) Administration of special assistance programs to areas facing urgent employment and training needs that cross jurisdictional lines or that result from major plant closures, arrival and resettlement of a significant number of refugees, or comparable circumstances. (d) Local administration and operation of the statewide programs under this division, in accordance with an approved service delivery area plan. (e) Planning, design, and local oversight by local private industry councils pursuant to this division to ensure that the service delivery area plan responds appropriately to local economic conditions, local employment needs, and business and economic development strategies planned or being implemented within the area, as well as complies with the basic standards and provisions of this division. (f) Streamlining of the funding for programs authorized under this division, in accordance with the following principles: (1) Consolidation of funds in the Consolidated Work Program Fund pursuant to Section 15082, for distribution to the grant recipients selected within the service delivery areas to carry out the approved plans, of: (A) Those federal and state funds heretofore appropriated on a categorical basis for various programs authorized to provide job preparation, training, and placement services, which programs are integrated by this division into the locally operated statewide programs. (B) Other funds that the federal government may make available or the Legislature may appropriate for the statewide programs. (2) Retention by the department of the following funding sources: (A) The service delivery area's share of block grant funds distributed under paragraph (1), to support provision of services to service delivery area residents eligible under this division, in those service delivery areas where the state assumes this function in accordance with paragraph (2) of subdivision (c). (B) Federal and state funds received for the operation of demonstration and special assistance programs serving persons eligible under this division. When a demonstration program and its funding level become suitable for statewide institutionalization, local administrative responsibility for the program shall be assigned to the administrative entity within the service delivery area and its funding shall be moved to the Consolidated Work Program Fund established under paragraph (1). SEC. 53. Section 15005 of the Unemployment Insurance Code is amended to read: 15005. The designation of areas shall be consistent with the requirements of the federal Workforce Investment Act. Units of general local government with populations of 200,000 or more and consortia of contiguous units of local government with an aggregate population of 200,000 or more which serve a substantial part of a labor market area shall be designated service delivery areas, if they so request. Furthermore, consideration shall be given to service delivery area requests from any unit of general local government, with a population level below 200,000, which served as a prime sponsor under the California Work Opportunity and Responsibility for Kids (CalWORKs) program.