BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 363
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          Date of Hearing:   April 24, 2013

                           ASSEMBLY COMMITTEE ON INSURANCE
                                Henry T. Perea, Chair
                    AB 363 (Grove) - As Introduced: April 18, 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.

           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.

           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.  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.









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           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  
            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.  








                                                                  AB 363
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            5)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  
            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)
             








                                                                 AB 363
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          REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          None received

           Opposition 
           
          None received
           
          Analysis Prepared by  :    Paul Riches / INS. / (916) 319-2086