BILL ANALYSIS AB 2058 Page 1 Date of Hearing: May 5, 2010 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 2058 (Block) - As Amended: April 29, 2010 Policy Committee: Insurance Vote:8-4 Urgency: Yes State Mandated Local Program: No Reimbursable: SUMMARY 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 applicants. 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 AB 2058 Page 2 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. COMMENTS 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 AB 2058 Page 3 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