BILL ANALYSIS
AB 23 X3
Page 1
( Without Reference to File )
ASSEMBLY THIRD READING
AB 23 X3 (Coto and Arambula)
As Amended March 16, 2009
2/3 vote. Urgency
INSURANCE 8-2 APPROPRIATIONS 11-4
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|Ayes:|Coto, Blakeslee, |Ayes:|De Leon, Ammiano, |
| |Arambula, Carter, Feuer, | |Charles Calderon, |
| |Hayashi, Nava, Torres | |Fuentes, Hall, Jones, |
| | | |John Perez, Price, |
| | | |Skinner, Solorio, |
| | | |Torlakson |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Garrick, Niello |Nays:|Nielsen, Duvall, Harkey, |
| | | |Miller |
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SUMMARY : Establishes eligibility for an additional 20 weeks of
federally-funded extended unemployment insurance (UI) benefits.
Specifically, this bill :
1)Sets an "on" indicator for federal-state extended UI benefits
when the average rate of total unemployment in the state in
the most recent three months equals or exceeds 6.5%, and the
average rate of total unemployment in the most recent three
months equals or exceeds 110% of that average for either or
both of the corresponding three month periods ending in the
two preceding calendar years.
2)Specifies that this "on" indicator shall apply to weeks of
unemployment beginning on February 1, 2009, and shall become
inoperative on December 6, 2009, or on the date the federal
sharable extended compensation authorized by Public Law 111-5
(the 2009 federal economic stimulus legislation) expires,
whichever is later.
3)Establishes the total extended compensation amount that an
eligible individual may receive when the total unemployment
rate during the most recent three months exceeds 8%. In that
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instance, the amount shall be not less than whichever of the
following is the least:
a) 80% of the total amount of regular compensation payable
to him or her during that benefit year;
b) 20 times his or her average weekly benefit amount;
c) 46 times his or her average weekly benefit amount,
reduced by the regular compensation paid to him or her
during that benefit year.
4)Provides that individuals who continue to meet all other
requirements may not be required to re-apply for federal
extended UI benefits.
5)Specifies that these extended benefits (described in #3,
above) apply to weeks on or after February 1, 2009. This
state law and the authority for the benefits expires on
December 6, 2009, or on the date the federal sharable
compensation authorized by Public Law 111-5 expires, whichever
is later.
6)Establishes this act as an urgency statute necessary to
address the weakened state economy.
EXISTING LAW :
1)Establishes an "on" indicator for purposes of implementing
federal-state UI extended benefits if during the preceding 13
weeks the insured unemployment rate (IUR) equals or exceeds
6%, or 120% of the average of the rates for the corresponding
13-week period ending in each of the preceding two calendar
years and exceeds 5%.
2)Requires that in order to qualify for federal extended
benefits, an unemployed individual must have previously been
found eligible for regular UI, have exhausted their regular UI
benefits, must continue to seek work, and have had earnings
exceeding 40 times the weekly UI benefit during a one-year
base period, or earnings exceeding 1.5 times the highest
calendar quarter of earnings.
FISCAL EFFECT : The Assembly Appropriations Committee analysis
AB 23 X3
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states the following:
Increased federal funding in the range of $2.5 billion to $3
billion for 20 weeks of additional emergency UI benefits during
2009. Potential, likely minor, General Fund costs to state and
educational agencies (schools and colleges) related to emergency
benefit increases. Unknown impacts to local public agencies to
the extent increased federally funded benefits require an
increased employer contribution.
COMMENTS :
1)The UI Program is administered by the California Employment
Development Department (EDD) as part of a federal-state system
to provide unemployment compensation to workers who lose their
job through no fault of their own. The benefits range from
$40 to $450 per week in California depending upon earnings
during a 12-month base period. The regular UI Program is
financed by employers who pay unemployment taxes on the first
$7,000 of earnings by each worker.
In the most recent period in which data are available, January
2009, there were 1,863,000 people unemployed in California and
the unemployment rate was 10.1%. In January 2009, 717,525
people received regular UI benefits during the survey week.
Another 259,903 people were certified for federal emergency UI
benefits in California in January 2009. Thus, only 52% of
unemployed workers in California receive UI benefits.
2)A new federal law, titled the American Recovery and
Reinvestment Act (ARRA, commonly referred to as the "federal
stimulus legislation"), provides authority for states with
high rates of unemployment to enact state legislation which
permits long-term unemployed people to access up to an
additional 20 weeks of extended benefits under the UI Program
that are 100% payable by the federal government. This bill
proposes to accomplish this for California.
3)Under existing law, the maximum duration of regular UI
benefits is 26 weeks and the maximum duration of federal
emergency unemployment benefits is 33 weeks. Thus, the
present maximum duration of UI benefits in California is 59
weeks. The enactment of the federal ARRA and this bill will
make it possible for long-term unemployed Californians, who
meet specific criteria, to obtain up to a total of 79 weeks of
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unemployment benefits (26+33+20 weeks). These 20 weeks of
extended benefits would not affect employers' reserve
accounts.
4)The federal extended UI benefits made available by this bill
(AB 23 X3) to unemployed residents of California will result
in 100% federal funding during calendar year 2009. This
amount is estimated to be between $2.5 billion and $3 billion
in benefits in 2009. This bill will not cause an increase in
state costs during calendar year 2010 as a result of the
extended benefits provision (i.e., there will not be a 50/50
split of federal and state costs for extended UI benefits
during calendar year 2010 as a result of this bill). The bill
specifies that the extended benefits provision sunsets on
December 6, 2009, or on the date the federal sharable extended
compensation authorized by the federal ARRA legislation
expires, whichever is later. The relevant federal provision
expires on December 31, 2009 (Section 2005 (a) of the ARRA, as
cited in the text of AB 23 X3).
Analysis Prepared by : Manny Hernandez /INS. / (916) 319-2086
FN: 0000192