BILL ANALYSIS
AB 2058
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Date of Hearing: May 5, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2058 (Block) - As Amended: April 29, 2010
Policy Committee: Insurance
Vote:8-4
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill reduces barriers to enrollment in the California
Training Benefits Program (CTB). The CTB is administered by the
Employment Development Department (EDD) to allow unemployed
individuals to pursue professional training while employed and
continue to receive unemployment insurance (UI) benefits. This
bill makes changes to conform to general recommendations of the
federal government. Specifically, this bill:
1)Requires eligibility to be automatic if an applicant is a
verified participant in a Workforce Investment Act (WIA)
program, a Trade Adjustment Assistance (TAA) program, an
Employment Training Panel (ETP) program, or a California Work
Opportunity and Responsibility to kids (CalWORKs) program.
Under current law, EDD is authorized to approve, but is not
required to approve, participation related to these programs.
2)Expands potential eligibility to include circumstances related
to plant closures, technological advancements, lack of
employment demand, increased future demand, and a surplus of
employees in specific trades.
3)Expands notifications for EDD to provide to potential CTB
applicants.
FISCAL EFFECT
1)Costs of $10 million to $20 million from the UI Trust Fund
(employer financed special fund) to increase enrollment in the
California Training Benefits (CTB) program by 5% to 10%. CTB
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provides up to 26 additional weeks of unemployment insurance
benefits to allow individuals to enhance professional skills
while unemployed. Under current law 64,000 individuals applied
for CTB. 20,000 applications were approved. This bill may
increase the number of individuals approved by significantly
reducing barriers and broadening eligibility.
2)The California UI trust fund is insolvent due to the chronic
underfunding of the UI system. The system is financed by
unemployment tax contributions paid by employers. Recent
estimates show a $7 billion deficit in the 2009 calendar year,
rising to $18 billion in 2010 and $27 billion in 2011.
California has borrowed about $4 billion from the federal
government, permitting California to make benefit payments to
UI claimants without interruption. Federal loans lasting more
than one year generally accumulate interest charges of about
5% per year on the outstanding balance.
COMMENTS
1)Rationale . This bill is sponsored by the California Labor
Federation (AFL-CIO) to reduce barriers to enrollment in the
California Training Benefits Program. According to the author
and sponsor, too many potential participants are turned away
from CTB because of stringent eligibility standards. The
federal government has recently directed states to broaden
their definition of approved training, notify individuals
about benefits of the program, and to enable more workers to
obtain job training while unemployed.
This bill makes several changes to modify California law to
conform general federal guidance.
2)Background . The CTB allows eligible UI claimants who lack
competitive job skills to receive their UI benefits while
attending a training or retraining program approved by EDD.
Under CTB, the traditional role of UI changes from that of
partial wage to one of assisting in training or retraining in
an effort to return to full employment. The CTB provides
claimants enrolled in EDD-approved training and education
programs up to 26 weeks of UI benefits, in addition to the
standard 26 weeks of benefits. Participation in the CTB is
easier if enrolled in specified training programs.
3)Related Legislation . SB 968 (Negrete-McLeod), in the current
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session, contains similar provisions to reduce barriers to
enrollment in CTB. SB 968 is pending on the Suspense File of
the Senate Appropriations Committee. It is not currently an
urgency bill.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081