Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 152

Introduced by Assembly Member Yamada

January 18, 2013

An act to add Article 2.3 (commencing with Section 1301) to Chapter 5 of begin insert Part 1 of end insert Division 1 of, and to repeal and add Section 1300 of, the Unemployment Insurance Code, relating to unemployment insurance, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

AB 152, as amended, Yamada. Unemployment: Self-Employment Assistance Program.

Existing law provides for the payment of unemployment compensation benefits during the period that a person is unemployed. Existing law imposes various requirements on the payments of benefits, including work search requirements. Existing law also establishes retraining programs for unemployed workers. Prior law, enacted in 1994 and repealed in 2005, established the Self-Employment Assistance Program for displaced workers.

This bill would establish a similar Self-Employment Assistance Program, to be administered by the Director of the Employment Development. The bill would provide for a weekly allowance for participants equal to regular unemployment benefits, subject to various limits, and would impose various eligibility requirements upon participants, and would waive requirements relating to job search and self-employment, as specified.

Since the benefits would be payable from the continuously appropriated Unemployment Fund, the bill would make an appropriation.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 1300 of the Unemployment Insurance
Code is repealed.

SEC. 2.  

Section 1300 is added to the Unemployment Insurance
Code, to read:

1300.  

The Legislature finds and declares all of the following:

(a) California and the national economy are recovering from
the deepest recession since the Great Depression; recent data
indicates that approximately 700,000 Californians are currently
claiming unemployment insurance benefits.

(b) The demand for unemployment insurance benefits remains
unusually high because more people are staying unemployed
longer. Global competition and rapidly evolving technologies have
resulted in the dislocation of millions of workers from their jobs,
and even with the creation of new jobs, layoffs have become
permanent instead of a temporary experience during fluctuation
in the business cycle.

(c) As reported in the November 2012 California Labor Market
Review, 45.7 percent, or approximately begin delete 8887,00 end delete begin insert 888,700 end insert of those
unemployed have been so for 27 weeks or more and approximately
34.6 percent of all unemployed, or 671,000, have been so for one
year or more.

(d) Currently, 73 weeks of benefits, regular unemployment
insurance combined with federal extensions, is the maximum
number of weeks a claimant may collect. As of December 17,
2012, over 923,000 unemployed workers in California have run
out of all benefits.

(e) There remains a critical need for California policies that will
create faster economic and job growth and support for those
struggling to find a job.

(f) In 1993, the federal government created the Self-Employment
Assistance Program for a five-year period, based on positive results
from experimental self-employment demonstration projects
conducted by the United States Department of Labor, in
collaboration with state employment agencies. Federal law made
the program permanent in 1998.

(g) Prior California law, enacted in 1994 and repealed in 2005,
established the state Self-Employment Assistance Program as an
alternative use of unemployment insurance. This program was an
important component of a broader workforce system strategy to
promote entrepreneurship and microbusiness development, both
as a reemployment strategy and to support economic development
through job creation.

(h) State unemployment insurance programs in Delaware,
Maine, New Jersey, New York, and Oregon actively offer
unemployed workers the option of reemployment through
self-employment assistance programs.

begin delete

(I)

end delete

begin insert (i) end insert  The Middle Class Tax Relief and Job Creation Act of 2012
expanded Self-Employment Assistance Program eligibility,
provided funding for states to implement or improve these
programs, and directed the Department of Labor and the Small
Business Administration to coordinate efforts to help more
Americans start and grow small businesses.

(j) The Middle Class Tax Relief and Job Creation Act of 2012
provides thirty-five million dollars ($35,000,000) for
Self-Employment Assistance Program grants. Of this amount,
California could receive approximately five million three hundred
thousand dollars ($5,300,000). Of this amount, four million six
hundred thousand dollars ($4,600,000) is available for
implementation and administration of the Self-Employment
Assistance Program. The remaining seven hundred sixty-nine
thousand seven hundred ninety-six dollars ($769,796) is available
for the promotion of the Self-Employment Assistance Program.

(k) The Self-Employment Assistance Program is a voluntary
state-run program that provides unemployed individuals financial
support while they pursue full-time self-employment assistance
activities that lead to establishing a business and becoming
self-employed.

(l) The California Employment Development Department (EDD)
must identify an individual, through a worker profiling system, as
likely to exhaust benefits to receive, in lieu of unemployment
benefits, a weekly allowance equal to the individual’s weekly
unemployment compensation benefit without having to search for
full-time wage employment.

(m) The EDD monitors self-employment assistance activities
that include entrepreneurial training, business counseling, and
business technical assistance. A network of more than 125
organizations throughout the state provides these services.

(n) The Self-Employment Assistance Program is a limited
program appropriate to just a small fraction of unemployment
insurance benefit claimants. It can help some current
unemployment insurance benefit recipients and those who have
exhausted their unemployment insurance benefits, probably no
more than one or 2 percent.

(o) It is, therefore, the intent of the Legislature to enact
legislation that would authorize the establishment of a
Self-Employment Assistance Program administered by the Director
of Employment Development for the state to become eligible to
apply for federal funds by June 30, 2013, to establish, promote,
and operate the program.

SEC. 3.  

Article 2.3 (commencing with Section 1301) is added
to Chapter 5 of Part 1 of Division 1 of the Unemployment
Insurance Code, to read:

 

Article 2.3.  Self-Employment Assistance Program

 

1301.  

As used in this article:

(a) “Full-time basis” shall have the same meaning as is contained
in regulations prescribed by the director.

(b) “Regular benefits” means benefits payable to an individual
under this part, including benefits payable to federal civilian
employees and to ex-service members pursuant to Chapter 85
(commencing with Section 8501) of Title 5 of the United States
Code, other than additional and extended benefits.

(c) “Self-employment assistance activities” means activities
approved by the director in which an individual begin delete , identified through
a worker profiling system as likely to exhaust regular benefits, end delete
participates for the purpose of establishing a business and becoming
self-employed. These activities shall include, but are not limited
to, entrepreneurial training, business counseling, and technical
assistance.

(d) “Self-employment assistance allowance” means an allowance
payable in lieu of regular benefits and from the Unemployment
Fund established under Section 1521 to an individual participating
in self-employment assistance activities who meets the
requirements of this article.

(e) “Self-Employment Assistance Program” means the program
that enables an unemployed individual approved under this article
to engage in self-employment assistance activities on a full-time
basis that will lead to establishing a business and becoming
self-employed.

1302.  

The weekly allowance payable under this article to an
individual shall be equal to the weekly benefit amount for regular
benefits otherwise payable under Article 2 (commencing with
Section 1275). The sum of the allowance payable under this article
and the regular benefits paid under this part with respect to any
benefit year shall not exceed the maximum benefit amount as
established by Section 1281 with respect to that benefit year.

1303.  

The allowance described in Section 1302 shall be payable
to an individual at the same interval, on the same terms, and subject
to the same conditions as regular benefits under this part, except
as follows:

(a) The requirements relating to availability for work, active
search for work, and refusal to accept work shall not apply to any
week that the individual is in training or engaged in
self-employment activities as approved by this article.

(b) Income earned by an individual while engaged in
self-employment activities as approved under this article shall not
be construed to be wages or compensation for personal services
under this division, and benefits payable under this division shall
not be denied or reduced because of those payments.

(c) An individual who fails to participate in self-employment
assistance activities begin delete or who fails to actively engage end delete on a full-time
basis in activities, which may include training begin delete , relating end delete begin insert related end insert to
the establishment of a business and becoming self-employed shall
be disqualified for the week the failure occurs.

1304.  

An individual is eligible to be paid a self-employment
assistance allowance if he or she meets all of the following
conditions:

(a) Is eligible to receive regular unemployment compensation
under state law.

(b) Has been identified pursuant to an automated profiling
system as likely to exhaust regular unemployment compensation.

(c) Has been approved for participation in the Self-Employment
Assistance Program by the director.

(d) Is engaged on a full-time basis in self-employment assistance
activities, which may include, but not be limited to, entrepreneurial
training, business counseling, and technical assistance related to
establishing a business and becoming self-employed.

1305.  

The aggregate number of individuals receiving the
allowance under this article begin delete at any time end delete shall not exceed 5 percent
of the number of individuals receiving regular benefits begin insert in the same
week end insert . The director shall, through regulations, prescribe those
actions necessary to ensure the requirements of this section are
met.

1306.  

(a) Self-employment assistance allowances paid under
this article shall be charged to employers as provided under
provisions of this part begin delete relating end delete begin insert related end insert to the charging of regular
benefits. Costs of administering the self-employment assistance
allowances are payable from the Self-Employment Assistance
Program grant received from the federal Department of Labor,
which allocates approximately five million three hundred thousand
dollars ($5,300,000) to California for such purposes. Costs of
providing self-employment assistance activities, such as business
training, business counseling, and technical assistance are payable
from federal Workforce Investment Act of 1998 funds and other
government and private grants.

(b) For purposes of this article, costs of administering the
program include marketing, staff training, review of applications,
assessment of applicants, payment of allowances, and relating
information technology costs.

1307.  

The provisions of this article shall become operative two
weeks beginning after the effective date of this article or two weeks
beginning after any plan required by the United State Department
of Labor relating to a Self-Employment Assistance Program is
approved by the United States Department of Labor, whichever
date is later. Immediately upon enactment of this article, the
director shall develop a Self-Employment Assistance Program
plan and seek approval from the United States Department of
Labor.

SEC. 4.  

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

In order to ensure that the Employment Development Department
postmark a completed application on or before June 30, 2013, in
order to receive grants from the United States Department of Labor
to develop, enhance, and promote a Self-Employment Assistance
Program, it is necessary that this act take effect immediately.