BILL ANALYSIS
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THIRD READING
Bill No: AB 23XXX
Author: Coto (D) & Arambula (D), et al
Amended: 3/23/09 in Assembly
Vote: 27 - Urgency
WITHOUT REFERENCE TO FILE
SEN. LABOR & INDUSTRIAL RELATIONS COMMITTEE : 5-0, 3/25/09
AYES: DeSaulnier, Wyland, Ducheny, Leno, Yee
NO VOTE RECORDED: Cogdill
SENATE APPROPRIATIONS COMMITTEE : Not available
SUBJECT : Unemployment insurance: extended benefits
SOURCE : Author
DIGEST : This bill establishes eligibility for an
additional 20 weeks of federally-funded extended
unemployment insurance benefits.
ANALYSIS :
Existing Law :
1. Establishes an on indicator for purposes of implementing
federal-state unemployment insurance (UI) extended
benefits if during the preceding 13 weeks the insured
unemployment rate (IUR) equals or exceeds six percent or
120 percent of the average of the rates for the
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corresponding 13-week period ending in each of the
preceding two calendar years and exceeds five percent.
2. Requires that in order to qualify for federal extended
benefits, an unemployed individual must have previously
been found eligible for regular UI, have exhausted their
regular UI benefits, must continue to seek work, and
have had earnings exceeding 40 times the weekly UI
benefit during a one-year base period, or earnings
exceeding 1.5 times the highest calendar quarter of
earnings.
This bill establishes eligibility for an additional 20
weeks of federally-funded extended UI benefits.
Specifically, this bill:
1. Sets an "on" indicator for federal-state extended UI
benefits when the average rate of total unemployment in
the state in the most recent three months equals or
exceeds six and five-tenth percent, and the average rate
of total unemployment in the most recent three months
equals or exceeds 110 percent of that average for either
or both of the corresponding three month periods ending
in the two preceding calendar years.
2. Specifies that this "on" indicator shall apply to weeks
of unemployment beginning on February 1, 2009, and
continuing until the week ending three weeks prior to
the last week for which 100 percent federal sharing of
UI costs is authorized by Public Law 111-5 (i.e.,
December 31, 2009).
3. Establishes the total extended compensation amount that
an eligible individual may receive when the total
unemployment rate during the most recent three months
exceeds eight percent. In that instance, the amount
shall be not less than whichever of the following is the
least:
(1) 80 percent of the total amount of regular
compensation payable to him or her during that
benefit year.
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(2) 20 times his/her average weekly benefit amount.
(3) 46 times his/her average weekly benefit amount,
reduced by the regular compensation paid to him/her
during that benefit year.
4. Establishes this act as an urgency statute necessary to
address the weakened state economy.
Comments
According to the Assembly Appropriations Committee
analysis: increased federal funding in the range of $2.5
billion to $3 billion for 20 weeks of additional emergency
UI benefits during 2009. Potential, likely minor, General
Fund costs to state and educational agencies (schools and
colleges) related to emergency benefit increases. Unknown
impacts to local public agencies to the extent increased
federally funded benefits require an increased employer
contribution.
The UI Program is administered by the California Employment
Development Department (EDD) as part of a federal-state
system to provide unemployment compensation to workers who
lose their job through no fault of their own. The benefits
range from $40 to $450 per week in California depending
upon earnings during a 12-month base period. The regular
UI Program is financed by employers who pay unemployment
taxes on the first $7,000 of earnings by each worker.
In the most recent period in which data are available,
February 2009, there were 1,950,000 people unemployed in
California and the unemployment rate was 10.5 percent. In
February 2009, 768,762 people received regular UI benefits
during the survey week. Another 259,903 people were
certified for federal emergency UI benefits in California
in January 2009.
A new federal law, titled the American Recovery and
Reinvestment Act (ARRA, commonly referred to as the
"federal stimulus legislation"), provides authority for
states with high rates of unemployment to enact state
legislation which permits long-term unemployed people to
access up to an additional 20 weeks of extended benefits
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under the UI Program that are 100 percent payable by the
federal government. This bill proposes to accomplish this
for California.
Under existing law, the maximum duration of regular UI
benefits is 26 weeks and the maximum duration of federal
emergency unemployment benefits is 33 weeks. Thus, the
present maximum duration of UI benefits in California is 59
weeks. The enactment of the federal ARRA and this bill
will make it possible for long-term unemployed
Californians, who meet specific criteria, to obtain up to a
total of 79 weeks of unemployment benefits (26+33+20
weeks). These 20 weeks of extended benefits will not
affect employers' reserve accounts.
The federal extended UI benefits made available by this
bill to unemployed residents of California will result in
100 percent federal funding during calendar year 2009.
This amount is estimated to be between $2.5 billion and $3
billion in benefits in 2009. This bill will not cause an
increase in state costs during calendar year 2010 as a
result of the extended benefits provision. This version of
the bill incorporates language worked out with EDD and the
Administration.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 3/25/09)
American Federation of State, County and Municipal
Employees
California Bean Shippers Association
California Business Properties Association
California Chamber of Commerce
California Citrus Mutual
California Construction and Industrial Materials
Association
California Farm Bureau Federation
California Federation of Teachers
California Grain and Feed Association
California Grocers Association
California Hospital Association
California Independent Grocers Association
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California Labor Federation
California Manufacturers and Technology Association
California Nurses Association
California Pear Growers Association
California Professional Firefighters
California Retailers Association
California Rural Legal Assistance Foundations
California Seed Association
California State Floral Association
California Warehouse Association
California-Nevada Conference of Operating Engineers
Lumber Association of California and Nevada
National Association of Professional Employer Organizations
National Federation of Independent Business
Nisei Farmers League
Pacific Coast Rendering Association
Pacific Egg and Poultry Association
Service Employees International Union, State Council
Western Growers Association.
AB:do 3/25/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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