BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
2058 (Block)
Hearing Date: 8/12/2010 Amended: 6/21/2010
Consultant: Bob Franzoia Policy Vote: L&IR 4-1
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BILL SUMMARY: AB 2058 would establish the California Training
Benefits (CTB) Program within the Employment Development
Department (department) and revise eligibility requirements for
unemployment compensation benefits to specify that a person who
qualifies for such benefits, extended duration benefits, or
federal-state extended benefits or any federally funded
unemployment compensation benefits shall be deemed to
automatically be eligible for the program during a period of
training or retraining. This bill would require that a
determination of eligibility for training or retraining be
issued to a person if any of specified conditions apply. This
bill would require that, if training or retraining is not
authorized under provisions governing automatic eligibility for
those benefits, a determination of potential eligibility for
benefits be issued to the person if the department finds that
specified criteria apply. Because this bill would make various
changes to existing eligibility requirements for training and
retraining benefits, which would result in additional amounts
being payable from the Unemployment Fund for those benefits,
this bill would make an appropriation. The bill would require
the department to prepare a report and make specified
information available online.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Increase of training Up to $4,000* Up to $8,000Up to
$8,000 Special**
benefits eligibility
EDD administration Unknown, likely significant
administrative Special***
savings annually
* Average cost for each additional 1,000 persons, who would
otherwise not be eligible under current law, to continue
receiving unemployment insurance benefits while engaging in a
training or retraining program. At the average weekly benefit
($304), the maximum cost to the Unemployment Fund could be
$7,904,000 (1,000 new applications x 26 weeks maximum x $304)
annually. When a claimant completes training before the 26 week
limit the benefits terminate.
** Unemployment Fund
*** Unemployment Administration Fund
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STAFF COMMENTS: SUSPENSE FILE.
Unemployment insurance (UI) is a federal-state program that
provides weekly payments to eligible persons who lose their jobs
through no fault of their own. The UI program is
financed by employers who pay unemployment taxes on the first
$7,000 in wages paid
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AB 2058 (Block)
to each employee in a calendar year. The benefits range from
$40 to $450 per week depending upon earnings during a 12 month
base period. Under current law, a person must be approved for
training before training benefits are paid from the Unemployment
Fund, a continuously appropriated fund.
Under this bill, a person would be eligible for additional UI
benefits. The cost to the Unemployment Fund would be for those
additional UI payments for training that would otherwise not be
approved under current law. Under current law, a person has to
apply to the department for a determination of eligibility for
UI benefits while receiving training. Under this bill, a person
may automatically be eligible for the UI benefits.
The department notes several variables that make it difficult to
estimate who might be eligible for these benefits and for how
long. For example, this bill would provide eligibility for
persons who select a training provider from the state Eligible
Training Provider List. Many persons who are currently approved
for CTB benefits authorized by the Workforce Investment Act
(WIA) are in training with providers on that list. This bill
would provide the same approval for persons who arrange their
own training using that list, but do not go through the WIA.
In 2009, there were over 3.8 million claims filed for UI
benefits and a total of 2.5 million eligibility determinations
conducted. Of those determinations, 64,209 (2.5 percent) were
for the CTB program. The department found 20,366 persons
eligible to participate in the CTB program or less than
two-tenths of one percent of the total UI claims filed.
While 43,843 persons were found ineligible to participate in the
CTB program, many of these persons may have received UI benefits
because their training did not prevent them from accepting
full-time work and they continued to seek work. The number of
persons whose training actually led to a denial of UI benefits
is unknown, but most likely it is a relatively small number when
compared to the total number of persons who filed a claim and
received benefits. Furthermore, many persons who would be
denied benefits may opt to drop training in order to retain
benefits as their only financial safety net.
This bill's impact to the UI program would likely be limited to
a small sub-set of claimants that includes those who were denied
CTB participation under current law and those who would not meet
the UI program's requirements for being available for work and
seeking work. It is this sub-set of claimants who were denied
to participate in the CTB program and did not meet the other
eligibility requirements that may benefit from this bill.