BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           2055 (De La Torre)
          
          Hearing Date:  8/2/2010         Amended: 4/13/2010
          Consultant:  Bob Franzoia       Policy Vote: L&IR 4-1
          _________________________________________________________________ 
          ____
          BILL SUMMARY: AB 2055 would clarify provisions governing  
          eligibility for benefits and employer's reserve accounts, in  
          order that "domestic partner" also includes a person to whom  
          domestic partnership is imminent.  Because the bill would  
          provide for additional amounts payable for unemployment  
          insurance (UI) benefits from the Unemployment Fund, a  
          continuously fund, the bill would make an appropriation.
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2010-11      2011-12       2012-13     Fund
           Domestic partner eligibility      Minor, absorbable costs  
          annually               Special*
          for UI benefits                                         

          * Unemployment Fund
          _________________________________________________________________ 
          ____

          STAFF COMMENTS:  Current law provides that a person may be  
          deemed to have left his or her most recent work with good cause  
          if he or she left the employer's employ to accompany his or her  
          spouse or domestic partner to a place from which it is  
          impractical to commute to the employment and specifies that  
          "spouse" includes a person to whom marriage is imminent.

          Current law also provides that if a person left the employer's  
          employ under certain circumstances, including, among others, if  
          he or she left employment to accompany his or her spouse or  
          domestic partner to a place from which it is impractical to  
          commute to the employment, the UI benefits paid to the person  
          are not charged to the employer's reserve account.  Thus, if an  
          employer has an employee who qualifies for this UI benefit, the  
          employer's UI tax rate does not change to account for the cost  
          of the increased UI benefit payment.  Instead, the good cause  
          costs are spread amongst all employers.











          Under this bill, a person may receive up to 26 weeks of UI  
          benefits, the same amount any person determined eligible for UI  
          could potentially collect. "Imminent" is determined when EDD is  
          determining eligibility for benefits.  Under this bill (and in  
          current law when marriage is imminent), an individual who quits  
          his or her job to relocate with a significant other and the two  
          people are in the process of becoming registered domestic  
          partners (imminent), that individual may be eligible for UI  
          benefits provided all other requirements, including  
          demonstrating all reasonable attempts to preserve the employment  
          relationship are met.  

          Expanding UI eligibility to include persons who are in the  
          process of becoming registered domestic partners would likely  
          affect a very small group and have a minimal impact to the  
          Unemployment Fund.  Approximately 0.78 percent of all UI benefit  

          Page 2
          AB 2055 (De La Torre)

          eligibility issues adjudicated involve a person who quit due to  
          domestic reasons, which includes quitting work to attend to an  
          ill family member, a lack of child care, a spousal move, etc.   
          This bill would only impact a sub-set of the 0.78 percent of all  
          eligibility issues involving a quit for domestic reasons, so the  
          potential number of persons who would benefit from this bill  
          likely would be very few.

          California Code of Regulation Title 22, Section 1256-12  
          provides:
          In some cases a claimant may quit well in advance of the  
          intended marriage.  In such cases, good cause will be dependent  
          upon why the claimant quit at the time.  As to how many days  
          prior to the marriage a claimant may quit and still have good  
          cause, no arbitrary rule can be established.  Rather, this is  
          dependent upon the nature and extent of advance preparations  
          that were to be made, and whether or not these arrangements  
          could have been accomplished without leaving work that soon.

          Occasionally, the marriage is delayed due to circumstances  
          beyond the claimant's control.  As long as the marriage was  
          imminent at the time of the quit and the claimant could not have  
          foreseen the delay, good cause will still exist.

          As of March 30, 2010, the California Secretary of State reported  










          that there were 57,286 registered domestic partners.  However,  
          eligibility created by imminent domestic partnership should  
          occur infrequently since the time to process a domestic  
          partnership registration is only five to ten days.
          
          UI tax rates are assigned to employers based on "experience  
          rating."  Essentially, the more layoffs and benefits paid to  
          former employees, the higher the tax rate for the employer.   
          This is meant to encourage employers to maintain a stable  
          workforce with fewer layoffs.  However, socialized costs are  
          also included when calculating an employer's UI tax rate and  
          therefore have the potential to increase an employer's tax rate  
          although the charges are unrelated to the individual employer's  
          use of the UI system.

          Currently, the average UI benefit is $304 per week.  If an  
          average benefit was paid for one week, more than 493 persons  
          would need to avail themselves of this benefit annually to incur  
          costs of more than $150,000.