BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 2058
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          Date of Hearing:   May 5, 2010

                                Felipe Fuentes, Chair

                    AB 2058 (Block) - As Amended:  April 29, 2010 

          Policy Committee:                              Insurance  

          Urgency:     Yes                  State Mandated Local Program:  
          No     Reimbursable:              


          This bill reduces barriers to enrollment in the California  
          Training Benefits Program (CTB). The CTB is administered by the  
          Employment Development Department (EDD) to allow unemployed  
          individuals to pursue professional training while employed and  
          continue to receive unemployment insurance (UI) benefits. This  
          bill makes changes to conform to general  recommendations of the  
          federal government. Specifically, this bill: 

          1)Requires eligibility to be automatic if an applicant is a  
            verified participant in a Workforce Investment Act (WIA)  
            program, a Trade Adjustment Assistance (TAA) program, an  
            Employment Training Panel (ETP) program, or a California Work  
            Opportunity and Responsibility to kids (CalWORKs) program.  
            Under current law, EDD is authorized to approve, but is not  
            required to approve, participation related to these programs. 

          2)Expands potential eligibility to include circumstances related  
            to plant closures, technological advancements, lack of  
            employment demand, increased future demand, and a surplus of  
            employees in specific trades. 

          3)Expands notifications for EDD to provide to potential CTB  

           FISCAL EFFECT  

          1)Costs of $10 million to $20 million from the UI Trust Fund  
            (employer financed special fund) to increase enrollment in the  
            California Training Benefits (CTB) program by 5% to 10%. CTB  


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            provides up to 26 additional weeks of unemployment insurance  
            benefits to allow individuals to enhance professional skills  
            while unemployed. Under current law 64,000 individuals applied  
            for CTB. 20,000 applications were approved. This bill may  
            increase the number of individuals approved by significantly  
            reducing barriers and broadening eligibility. 

          2)The California UI trust fund is insolvent due to the chronic  
            underfunding of the UI system. The system is financed by  
            unemployment tax contributions paid by employers. Recent  
            estimates show a $7 billion deficit in the 2009 calendar year,  
            rising to $18 billion in 2010 and $27 billion in 2011.  
            California has borrowed about $4 billion from the federal  
            government, permitting California to make benefit payments to  
            UI claimants without interruption. Federal loans lasting more  
            than one year generally accumulate interest charges of about  
            5% per year on the outstanding balance.


           1)Rationale  . This bill is sponsored by the California Labor  
            Federation (AFL-CIO) to reduce barriers to enrollment in the  
            California Training Benefits Program. According to the author  
            and sponsor, too many potential participants are turned away  
            from CTB because of stringent eligibility standards. The  
            federal government has recently directed states to broaden  
            their definition of approved training, notify individuals  
            about benefits of the program, and to enable more workers to  
            obtain job training while unemployed.

            This bill makes several changes to modify California law to  
            conform general federal guidance. 

           2)Background  . The CTB allows eligible UI claimants who lack  
            competitive job skills to receive their UI benefits while  
            attending a training or retraining program approved by EDD.  
            Under CTB, the traditional role of UI changes from that of  
            partial wage to one of assisting in training or retraining in  
            an effort to return to full employment. The CTB provides  
            claimants enrolled in EDD-approved training and education  
            programs up to 26 weeks of UI benefits, in addition to the  
            standard 26 weeks of benefits. Participation in the CTB is  
            easier if enrolled in specified training programs. 

           3)Related Legislation  . SB 968 (Negrete-McLeod), in the current  


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            session, contains similar provisions to reduce barriers to  
            enrollment in CTB. SB 968 is pending on the Suspense File of  
            the Senate Appropriations Committee. It is not currently an  
            urgency bill. 

           Analysis Prepared by  :    Mary Ader / APPR. / (916) 319-2081