BILL ANALYSIS Ó
AB 363
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Date of Hearing: April 10, 2013
ASSEMBLY COMMITTEE ON INSURANCE
Henry T. Perea, Chair
AB 363 (Grove) - As Introduced: February 14, 2013
SUBJECT : California Unemployment Insurance Appeals Board
SUMMARY : Prohibits a former legislator from being appointed to
the California Unemployment Insurance Appeals Board (board) for
two years after leaving office and prohibits a board member's
pay exceeding that of a member of the Assembly. Specifically,
this bill :
1)Removes the board chair and board members from existing
statutes establishing the salaries for those positions on
several boards and commissions.
2)Requires that the board chair and members receive a salary
determined by their appointing authority.
3)Prohibits setting board member salaries above the maximum
salary of the lowest paid member of the Assembly.
4)Prohibits a former legislator from being appointed to the
board in the two years after leaving office.
EXISTING LAW
1)Establishes the board to hear appeals of administrative
decisions made by the Employment Development Department (EDD),
including decisions regarding unemployment insurance
eligibility and benefits.
2)Specifies that there are five board members, including the
chair, to be appointed as follows: three by the Governor, one
by the Speaker of the Assembly, and one by the Senate Rules
Committee.
3)Specifies that board members serve 4 year terms.
4)Requires that board members be licensed attorneys with at
least one year of experience conducting hearings or five years
of legal practice.
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5)Specifies the salary paid to the chairpersons and members of a
number of boards and commissions in state government.
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose . According to the author, changes to the board made
last year were a good start, but further action must follow in
order to restore public trust in the board. A two-year period
after leaving the legislature before serving on the board is a
modest and sensible measure to assure the public that this
board is not merely a place for politically-favored
ex-lawmakers. Also, it is reasonable to expect that a member
of this board not receive a salary greater than an elected
member of the state Assembly. The public is justifiably upset
that a direct move from the Assembly to the board results in a
raise of nearly 30%. A reduction to a still generous salary
of $90,526 is a small step toward eroding the negative
perception of the Board. The legislature should demonstrate
to the people of California that it is a good steward of their
tax dollars and is willing to do what it takes to restore some
of their faith in state government.
2)Board Background . The board was created in 1943 as an
independent administrative court system for workers and
employers seeking to challenge decisions made by the EDD.
Appeals are the first opportunity for all parties to present
evidence and tell their side of the story before an
administrative law judge (ALJ) and have that ALJ decide the
case. The ALJ's decision may be appealed to the board whose
decision is final, unless overturned by a Superior Court
judge.
The board's services are free to the participants, and do not
require an attorney. The proceedings are funded almost
completely by federal dollars (93%), with state special funds
paying for costs related to disability and paid family leave
cases (6.6%), and the state General Fund paying for less than
one-half of one percent (0.4%) of the costs. In addition to
reviewing ALJs' decisions, the Board issues precedent
decisions and oversees board operations and its hearing
facilities in twelve field offices and 43 satellite facilities
around the state. In 2011 alone, CUIAB ALJs rendered
decisions in about 467,000 cases for over 250,000 employees
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and employers.
3)Recent Reforms . The Governor's 2012 -13 budget proposed to
eliminate the board and consolidate its functions under EDD.
In response to this proposal, the Legislature passed SB 1038
(Statutes of 2012, Chapter 46) which reduced the size of the
board from 7 members to 5 and requires board members to be
licensed attorneys with practice experience. In addition, the
2012-13 budget consolidated board administrative functions
with EDD to achieve $2 million in special fund savings and
eliminated 17.4 positions.
4)Workload . Board members, like the ALJs, consider appeals. In
fact, board members rendered over 32,000 decisions in 2012,
but that number understates the workload. Each decision
rendered by the board is the result of at least two board
members considering the appeal which has the effect of
doubling the workload to 64,000 board member decisions. To
continue to produce that many decisions, the now five member
board must average over 5,000 decisions per month (assuming
all five board member positions are continuously filled). In
addition to the workload associated with considering appeals,
board members are responsible for the overall functioning of
the board and its 875 employees.
5)Pay Disparity . The bill allows board member pay to be set by
each appointing authority and sets the maximum pay at the
maximum pay for members of the Assembly. Currently, a member
of the Assembly is paid $90,256. However, top pay for the
more than 200 ALJs at the board is over $114,000. It is
difficult to reconcile the workload and level of
responsibility carried by board members with a pay level as
much as 20% lower than that provided to the ALJs employed by
the board members.
6)Legislative History . The qualification and salary for members
of the board has been the subject of many bills in recent
years. The following bills addressed these issues:
2011-2012 Session -- SB 153 (Strickland) would have prohibited
members appointed to the Agricultural Labor Relations Board
(ALRB), the California Unemployment Insurance Appeals Board
(UIAB), the Public Employment Relations Board (PERB), and the
State Water Resources Control Board (SWRCB) from receiving a
salary and authorizes a member of these boards to receive a
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specified per diem payment ($100 per day). (Died in Senate
Governmental Organization Committee)
2009-2010 Session -- SB 685 (Strickland) would have
suspended the salaries for members of 12 specified state
boards and commissions for three fiscal years except that they
would have been allowed to receive a per diem payment. (Died
in Senate Governmental Organization Committee)
2007-2008 Session -- AB 2539 (Strickland) would have
eliminated the salary of any member of a state board or
commission that received a salary in excess of $100,000 in
2007 if a state law or regulation required the board to meet
two or less times per month. (Died in Assembly Business and
Professions Committee)
AB 309 (Tran) would have suspended the salaries for members of
10 specified state boards and commissions for three fiscal
years, except that they would have been allowed to receive a
per diem payment. (Died in Assembly Business and Professions
Committee)
2005-2006 Session -- AB 38 (Tran) This bill would have
suspended the salaries for members of 12 specified state
boards and commissions for three fiscal years, except that
they would have been allowed to receive a per diem payment.
(Died in Assembly Business and Professions Committee)
2003-2004 Session -- AB 556 (Strickland) would have suspended
the salaries for members of 14 specified state boards and
commissions for three fiscal years, except that they would
have been allowed to receive a per diem payment. (Died in
Assembly Business and Professions Committee)
REGISTERED SUPPORT / OPPOSITION :
Support
None received
Opposition
None received
Analysis Prepared by : Paul Riches / INS. / (916) 319-2086
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