BILL ANALYSIS                                                                                                                                                                                                    



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          CONCURRENCE IN SENATE AMENDMENTS
          AB 2058 (Block)
          As Amended  August 18, 2010
          Majority vote
           
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          |ASSEMBLY:  |58-19|(June 3, 2010)  |SENATE: |24-8 |(August 20,    |
          |           |     |                |        |     |2010)          |
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           Original Committee Reference:    INS.

          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. 

           The Senate amendments  :  

           1)Require the Employment Development Department (EDD) by  
            September 1, 2016, to prepare and submit to the Governor and  
            Legislature a report evaluating the effectiveness of the  
            California Training Benefits Program.  The report shall  
            include data on the number of individuals eligible for the  
            program and the number of individuals who participated in the  
            program and earned subsequent wages in the following calendar  
            year.

          2)Define the terms "accredited" and "accrediting agency."

          3)Provide that the bill shall become effective on January 1,  
            2011, unless EDD determines that implementation by that date  
            is not feasible, in which case EDD shall implement the bill no  
            later than July 1, 2011.

           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. 









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          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. 

          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 the California Work Opportunity and  
            Responsibility to Kids (CalWORKs) Program 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  








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               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  
               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)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. 

           AS PASSED BY THE ASSEMBLY  , this bill:

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









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          2)Provided 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)Required a determination of automatic eligibility for  
            retraining benefits to be issued if the Director of 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 CalWORKs, the  
            individual is a participant in training with a provider that  
            is certified 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)Allowed 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)Allowed EDD to inform all UI claimants of the availability of  
            retraining benefits, by on-line means.  This information would  
            be made available on EDD's Web site in close proximity to  
            information on UI claim forms.   
           
          FISCAL EFFECT  :   Costs of $2.5 million to $5 million from the  
          Unemployment 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.  

          2)This bill affects "Retraining Benefits" (as phrased in  
            Sections 1266 to 1274.10 of the Unemployment Insurance Code),  
            or the "California Training Benefits Program," as called by  








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            EDD on its printed materials and its Web site.  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 four to eight weeks.  As a result,  
            many people 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.

          3)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  
            the CalWORKs Program.  This bill will allow unemployed workers  








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            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.  
           

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


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