BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2058
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          ASSEMBLY THIRD READING
          AB 2058 (Block)
          As Amended  May 28, 2010
          2/3 vote.  Urgency 

           INSURANCE           8-4         APPROPRIATIONS      12-5        
           
           ----------------------------------------------------------------- 
          |Ayes:|Solorio, Caballero,       |Ayes:|Fuentes, Ammiano,         |
          |     |Charles Calderon, Carter, |     |Bradford,                 |
          |     |Feuer, Hayashi, Salas     |     |Charles Calderon, Coto,   |
          |     |Torres                    |     |Davis, Monning, Ruskin,   |
          |     |                          |     |Skinner, Solorio,         |
          |     |                          |     |Torlakson, Torrico        |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Blakeslee, Anderson,      |Nays:|Conway, Harkey, Miller,   |
          |     |Hagman, Niello            |     |Nielsen, Norby            |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :   Modifies the requirements for participating in the  
          state's retraining benefits program in order to allow unemployed  
          people to receive unemployment insurance (UI) benefits while  
          enrolled in a training program on a full-time basis.   
          Specifically,  this bill  :  

          1)Declares the policy of this state to assist individuals with  
            unemployment insurance (UI) benefits if these individuals need  
            training to upgrade their skills to become competitive in the  
            labor market.  

          2)Provides that UI benefits shall not be denied to an otherwise  
            qualified unemployed worker because he or she is participating  
            in, or applying for, eligible training or retraining.  

          3)Requires a determination of automatic eligibility for  
            retraining benefits to be issued if the Director of the  
            Employment Development Department (EDD) finds the training is  
            authorized by the federal Workforce Investment Act, the state  
            Employment Training Panel, the federal Trade Acts of 1974 and  
            2002, the American Recovery and Reinvestment Act of 2009, the  
            individual is a participant in the California Work Opportunity  
            and Responsibility to Kids Program (CalWORKs), the individual  
            is a participant in training with a provider that is certified  








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            and on the state's Eligible Training Provider List, or the  
            individual is a journey level union member in industry-related  
            training that is necessary to employment.  
           
           4)Allows the EDD Director to find that an unemployed individual  
            is eligible for training benefits if federal extended UI  
            benefits are in effect, the unemployed individual is  
            determined potentially eligible for retraining benefits, and  
            the individual is enrolled in a community college or other  
            accredited postsecondary education program with the purpose of  
            preparing the applicant in academic or job skills that will  
            increase employment opportunities or that leads to an  
            industry-recognized credential or certificate designed for a  
            specific occupation.

          5)Allows EDD to inform all UI claimants of the availability of  
            retraining benefits, by on-line means.  This information shall  
            be made available on EDD's Web site in close proximity to  
            information on UI claim forms.  Existing law already requires  
            this information to be conveyed verbally and in written form.   

           
           6)Provides that it is an urgency statute, allowing this bill to  
            take effect immediately upon enactment.

           EXISTING LAW  :

          1)Declares the policy of this state to assist individuals with  
            UI benefits if these individuals need training in demand  
            occupations to become competitive in the labor market. 

          2)Provides that UI benefits shall not be denied to an otherwise  
            qualified unemployed worker because he or she is in training  
            approved by the EDD Director. 

          3)Allows an unemployed person who files a UI claim to apply to  
            EDD for a determination of potential eligibility for  
            "retraining benefits" during a period of training.  Retraining  
            benefits allow people who qualify for UI benefits to  
            participate in training programs on a full-time basis and  
            receive UI benefits while being relieved of the obligations to  
            be available for work and to actively search for work each  
            week. 









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          4)Requires EDD to issue a determination of potential eligibility  
            for retraining benefits to an unemployed individual if the EDD  
            Director finds that the training is authorized by the federal  
            Workforce Investment Act, the state Employment Training Panel,  
            the federal Trade Act of 1974, as amended, or the individual  
            is a participant in CalWORKs and has entered into a contract  
            with the county welfare department to participate in an  
            education or training program.  

          5)Requires EDD to issue a determination of potential eligibility  
            for retraining benefits if the EDD Director finds that all of  
            the following facts apply:

             a)   The person has been unemployed for four or more  
               continuous weeks, or the person is unemployed and unlikely  
               to return to his or her most recent workplace because of a  
               plant closure or a substantial reduction in employment, or  
               because of a mental or physical disability which prohibits  
               the individual form utilizing existing occupational skills;

             b)   There is a lack of demand in the labor market area for  
               his or her occupational skills and the lack of employment  
               opportunities is expected to continue for an extended  
               period of time;

             c)   The training course of instruction relates to an  
               occupation or skill for which there are, or are expected to  
               be in the immediate future, reasonable employment  
               opportunities in the labor market area in this state in  
               which the individual intends to seek work;

             d)   If the person is a journey level union member, the  
               training course of instruction is specific job-related  
               training necessary due to changes in the technology, or  
               necessary to retain employment or to become more  
               competitive in obtaining employment;

             e)   The training or retraining course of instruction is one  
               approved by the EDD Director and can be completed within  
               one year;

             f)   The training or retraining course is a full-time course  
               prescribed for the primary purpose of training the  
               applicant in skills that will allow him or her to obtain  








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               immediate employment in a demand occupation and is not  
               primarily intended to meet the requirements of any degree  
               from a college, community college, or university;

             g)   The individual can be reasonably expected to complete  
               the training or retraining successfully; and,

             h)   The beginning date of training is more than three years  
               after the beginning date of training last approved for the  
               individual. 

          6)Provides that an unemployed individual receiving UI benefits,  
            who applies for retraining benefits no later than the 16th  
            week of receiving UI benefits, and is determined eligible for  
            the retraining benefits shall be entitled to a training  
            extension on his her UI claim to complete the approved  
            training.  

          7)Requires EDD to inform all UI claimants of the retraining  
            benefits.  This information shall be conveyed verbally or in  
            written form.  

          8)Requires the training extension of UI benefits to be charged  
            to the employer reserve accounts.

          9)Limits access to retraining benefits to instances when the EDD  
            Director finds that the person is potentially eligible for  
            retraining benefits or a training extension of UI benefits,  
            and the person submits with each claim a written certification  
            executed by a responsible person connected with the training  
            program certifying that the individual is enrolled in and  
            satisfactorily pursuing the training course of instruction. 

           FISCAL EFFECT  :   According to the Assembly Appropriations  
          Committee, costs of $2.5 million to $5 million from the UI Trust  
          Fund (employer financed special fund) to increase enrollment in  
          the California Training Benefits Program.

           COMMENTS  :   

          1)The purpose of this bill is to allow unemployed workers  
            receiving UI benefits to continue their coverage while  
            enrolled in job training or education courses to develop the  
            skills necessary for the state's changing work environment.  








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          2)This bill affects "Retraining Benefits" (as phrased in  
            Unemployment Insurance Code  Sections 1266 to 1274.10), or the  
            "California Training Benefits Program," as called by EDD on  
            its printed materials and its website.  It is the same  
            program.  The retraining benefits program allows people  
            receiving UI benefits to participate in approved training  
            programs without actively seeking work.  EDD is responsible  
            for determining whether UI recipients are eligible for  
            retraining benefits and may continue to receive UI  
            compensation.

          In May 2009, the U.S. Department of Labor issued a guidance  
            letter to state agencies such as EDD that administer the UI  
            Program.  Specifically, Training and Employment Guidance  
            Letter No. 21-08 encourages states to widen the types of  
            training and the conditions under which education and training  
            are considered "approved training" for purposes of the state's  
            UI law.  States are also asked to reconsider their laws and  
            regulations, and applicable administrative requirements, to  
            determine if their approved training requirements are  
            appropriate to the current economy.  That guidance letter  
            strongly encourages states to
            broaden their definition of approved training for UI  
            beneficiaries during economic downturns.

            Currently, until a determination of eligibility for retraining  
            benefits is complete, EDD will suspend the UI benefits.  With  
            the current severe recession, many unemployed Californians are  
            trying to regain competitive job skills by participating in  
            the California Training Benefits Program.  Unfortunately, the  
            UI benefits of many Californians who indicate on an EDD form  
            that they're enrolled in training have their UI benefits  
            suspended for a period of 4 to 8 weeks.  As a result, many  
            Californians decide to drop out of the job training to  
            preserve their eligibility for UI benefits.  This is contrary  
            to the direction of the federal Department of Labor which has  
            been strongly encouraging states to streamline their  
            administrative procedures and laws, if necessary, to assist  
            unemployed people to regain competitive job skills for the  
            current economy.  In fact, many people who experience a  
            suspension of UI benefits are found to have been eligible for  
            both UI and retraining benefits.  This bill proposes a series  
            of statutory changes to improve training opportunities.








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          3)According to the author, current law allows for the automatic  
            approval of training programs funded through the federal  
            Workforce Investment Act, federal Trade Acts, the state  
            Employment Training Panel, and CalWORKs.  This bill will allow  
            unemployed workers who enroll in programs listed in the  
            Eligible Training Provider List, authorized by the federal  
            Workforce Investment Act, to automatically qualify for  
            California Training Benefits without causing a break in UI  
            benefits.  This bill will also allow individuals to enroll in  
            community colleges or public universities to earn degrees or  
            certificates that will make them more employable and become  
            eligible for California Training Benefits.  

           4)The California Chamber of Commerce and the California  
            Manufacturers and Technology Association state their  
            opposition to this bill because it reaches further than timely  
            delivery of benefits and proposes to automatically approve  
            enrollment in training programs.  These groups also state that  
            the bill would create a different public policy which could  
            lead to fraud and abuse since unemployed individuals could use  
            their UI benefits to make lifestyle changes beyond those  
            required for re-employment, regardless of real employment  
            opportunities.  
             
          5)This legislative session, AB 2748 (Furutani) proposes as state  
            policy that unemployed individuals be provided retraining  
            benefits made available under the federal American Recovery  
            and Reinvestment Act (ARRA) of 2009.  Also, SB 968 (Negrete  
            McLeod) proposes a series of changes to the retraining  
            benefits program that are similar to those proposed by AB  
            2058.


           Analysis Prepared by  :    Manny Hernandez / INS. / (916)  
          319-2086.                                    

                                                                FN: 0004737