BILL ANALYSIS
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THIRD READING
Bill No: AB 2058
Author: Block (D), et al
Amended: 6/21/10 in Senate
Vote: 21
SENATE LABOR & INDUSTRIAL RELATIONS COMM : 4-1, 6/23/10
AYES: DeSaulnier, Ducheny, Leno, Yee
NOES: Hollingsworth
NO VOTE RECORDED: Wyland
SENATE APPROPRIATIONS COMMITTEE : 7-4, 8/12/10
AYES: Kehoe, Alquist, Corbett, Leno, Price, Wolk, Yee
NOES: Ashburn, Emmerson, Walters, Wyland
ASSEMBLY FLOOR : 58-19, 6/3/10 - See last page for vote
SUBJECT : Unemployment insurance: retraining benefits
SOURCE : California Labor Federation
California Workforce Association
DIGEST : The bill establishes the California Training
Benefits (CTB) Program within the Employment Development
Department (EDD) 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
CONTINUED
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requires that a determination of eligibility for training
or retraining be issued to a person if any of specified
conditions apply. This bill requires 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 EDD finds that specified criteria apply. This
bill also requires that EDD, no later than September 1,
2016, prepare and submit to the Governor and the
Legislature a report evaluating the effectiveness of the
California Training Benefits Program, as specified.
ANALYSIS : Existing law provides for the payment of
unemployment compensation benefits through the Unemployment
Insurance (UI) program, administered by EDD. The UI
program is a federal-state program that provides weekly
unemployment insurance payments to eligible workers who
lose their jobs through no fault of their own.
Existing law authorizes an unemployed individual who files
a claim for unemployment compensation benefits or extended
duration benefits, to apply to the EDD for a determination
of potential eligibility for benefits during a period of
training or retraining through the California Training
Benefit (CTB) program. The CTB program allows eligible UI
claimants to receive their UI benefits while attending a
training or retraining program approved by EDD. Claimants
attending an approved training course are not required to
look for work, be available for work or accept work while
in training. EDD is required to inform, either verbally or
in written form, all UI claimants of the retraining
benefits.
Under the required application process, the EDD schedules a
phone interview with the applicant to determine his/her
eligibility for CTB after the training has begun. The EDD
is prohibited from pre-determining CTB eligibility until
the individual has started to attend school or training.
Existing law requires EDD to issue a determination of
potential eligibility for retraining benefits to an
unemployed individual if the EDD Director finds that the
training is authorized by the following government
programs:
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? Workforce Investment Act;
? Employment Training Panel;
? Trade Adjustment Assistance; or
? California Work Opportunity and Responsibility to
Kids
Existing law also allows the approval of other training
programs, not authorized by one of the above, that are
determined by EDD to be eligible. Among other things, the
training must be:
? Full-time and must be completed in one year from
the beginning date of CTB approval, even if the UI
benefits expire before the conclusion of the training.
? Related to an occupation or skill for which there
are, or are expected to be, reasonable employment
opportunities in the labor market area in this state.
? If the person is a journey level union member, the
training course of instruction must be job-related and
necessary due to changes in technology, or necessary
to retain employment or to become more competitive in
obtaining employment.
Existing law provides that a UI benefits recipient, who
applies for retraining benefits no later than the 16th week
of receiving UI benefits, and is determined eligible for
the retraining benefits shall be entitled to a training
extension on his or her UI claim to complete the approved
training. Benefits paid under a training extension are
charged to the employer reserve accounts.
This bill modifies the requirement for participation in the
state's retraining benefits program in order to allow
unemployed individuals to receive UI benefits while
enrolled in a training program on a full-time basis.
Specifically, this bill:
1. Establishes the CTB Program in code and declares the
policy of this state to assist individuals with UI
benefits if these individuals need training or
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retraining to upgrade their skills in demand occupations
to become competitive in the labor market.
2. Provides that UI benefits shall not be denied to an
otherwise qualified unemployed individual because he or
she is participating in eligible training or retraining.
3. Revises current eligibility requirements to specify that
an unemployed individual, who qualifies for UI benefits
(and subsequent state or federal extensions) and applies
for the CTB program, shall be deemed to be automatically
eligible for the program during a period of training or
retraining.
4. Requires that a determination of automatic eligibility
for benefits be issued to an unemployed individual if
the director of EDD finds that:
? The training is authorized by the federal
Workforce Investment Act, the state Employment
Training Panel, the federal Trade Adjustment
Assistance as amended, or the California Work
Opportunity and Responsibility to Kids.
? The individual is a participant in training
with a provider that is certified and on the state's
Eligible Training Provider List.
? The individual is a journey level union member
in industry-related training necessary to
employment.
1. Provides that if training is not automatically
authorized under the above provisions, the director of
EDD shall issue a determination of potential eligibility
for benefits if the director finds that specified
criteria apply that includes, among others:
? That the director approved training be
completed within a reasonable period of time
(current law requires that it be completed within
one year).
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? If an unemployed individual is eligible for
training benefits and when federal extended UI
benefits are in effect, the individual can receive
benefits if he/she is enrolled in a community
college or other accredited postsecondary education
program with the purpose of preparing the applicant
in academic or job skills that will increase
employment opportunities or that leads to an
industry-recognized credential or certificate
designed for a specific occupation.
1. Allows EDD to inform all UI claimants of the
availability of training benefits online (in addition to
current laws requirement that it be provided verbally or
in written form) and requires that this information be
made available on the EDD's Web site in close proximity
to information on UI claim forms.
2. Deletes the requirement that the unemployed individual
submit written certification of participation in
approved training with each claim, and instead allows
EDD to prescribe the required certification through
regulations.
3. Requires that EDD, not later than September 1, 2016,
prepare and submit to the Governor and the Legislature a
report evaluating the effectiveness of the California
Training Benefits Program, as specified.
Related Legislation
SB 968 (Negrete McLeod) of 2010, is similar to this bill,
however, SB 968 does not deem an unemployed individual
automatically eligible for training benefits. SB 968 would
delete the provision of existing law that requires the
determination of potential eligibility and instead,
specifies that an unemployed person who is able to work is
eligible to receive training and retraining benefits if
he/she certifies on the UI claim form that he/she is
enrolled in a training program and lists a responsible
person connected with the program that certifies that the
person is enrolled and satisfactorily pursuing the program.
This bill passed the Senate Floor (22-11) on 6/1/10.
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FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12
2012-13 Fund
Increase of training Up to $4,000*Up to
$8,000 Up 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
SUPPORT : (Verified 8/16/10)
California Labor Federation (co-source)
California Workforce Association (co-source)
American Federation of State, County and Municipal
Employees, AFL-CIO
California Nurses Association/National Nurses Organizing
Committee
California Professional Firefighters
California State Employees Association
Community College League of California
Council of California Goodwill Industries
National Association of Workforce Boards
Riverside County Workforce Investment Board
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OPPOSITION : (Verified 8/16/10)
Department of Finance
California Hospital Association
ARGUMENTS IN SUPPORT : According to proponents,
California is facing a job loss crisis with unemployment at
historic highs of 12.6 percent in May 2010, and to make
matters worse, job seekers are spending longer periods of
time looking for work. Over 34 percent of the unemployed
have been looking for work for over 6 months, up 170.5
percent since 2008. The author believes that today's
unpredictable economic climate demands that we have a
modernized system capable of providing unemployed
Californians with the training they need to once again
contribute to our economy. In addition, proponents argue
that we must break down barriers preventing laid-off
workers from participating in training and skill
development that makes them competitive for jobs as our
economy recovers.
Proponents believe that this bill will make it easier for
unemployed Californians to access unemployment benefits
while enrolled in training programs to upgrade job skills.
This bill will also revise the Unemployment Insurance Code
to conform to federal guidance. Proponents believe that
automatically approving UI recipients for training programs
will allow the unemployed to register and attend training
without fear of an interruption or possible loss of their
benefits. In addition, proponents argue that automatic
enrollment into pre-approved training programs will
streamline the approval process and save EDD significant
resources and staff time. Overall, proponents argue that
helping the unemployed access retraining will greatly
benefit our local state economy, and will lure more
companies to do business in our state and hire skilled and
educated California workers.
ARGUMENTS IN OPPOSITION : According to opponents,
although they support benefits being paid timely to
individuals enrolled in training with a connection to
employment upon completion, they are opposed to this bill
because it would expand and increase the payment of
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training and/or retraining UI benefits. Opponents argue
that already current law allows unemployed workers
receiving UI benefits to continue their coverage while
enrolled in specified training or retraining as approved by
the Director of EDD. They feel that by establishing a
general broad threshold, this bill could open the door to
not only fraud and abuse, but also establishes a very
different public policy.
Opponents contend that in its October "Unemployment
Insurance Fund Forecast," EDD projected that the state's UI
Fund balance would have a deficit of $7.4 billion at the
end of 2009. They believe that it is inappropriate to
expand the payment of UI benefits at a time when the UI
Fund is depleted and California is compelled to borrow from
the Federal Government in order to pay UI benefits.
Opponents argue that this is not the time to incur still
higher UI costs by expanding available training benefits.
Furthermore, opponents argue that this bill allows
individuals that are unemployed to take this opportunity to
use their unemployment benefits to make lifestyle changes
beyond those required for re-employment, regardless of real
employment opportunities. Opponents believe that job
training benefits should be targeted to the needs of the
job market and the individual, not unilaterally provided
without qualification and without specific nexus to
employment.
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Bass, Beall, Block, Blumenfield,
Bradford, Brownley, Buchanan, Caballero, Charles
Calderon, Carter, Chesbro, Cook, Coto, Davis, De La
Torre, De Leon, Emmerson, Eng, Evans, Feuer, Fong,
Fuentes, Furutani, Galgiani, Gilmore, Hagman, Hall,
Hayashi, Hernandez, Hill, Huber, Huffman, Jones, Lieu,
Bonnie Lowenthal, Ma, Mendoza, Monning, Nava, Nestande,
Niello, Nielsen, V. Manuel Perez, Portantino, Ruskin,
Salas, Saldana, Skinner, Solorio, Swanson, Torlakson,
Torres, Torrico, Villines, Yamada, John A. Perez
NOES: Adams, Anderson, Bill Berryhill, Blakeslee, Conway,
DeVore, Fletcher, Fuller, Gaines, Garrick, Harkey,
Jeffries, Knight, Logue, Miller, Norby, Silva, Smyth,
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Tran
NO VOTE RECORDED: Tom Berryhill, Audra Strickland, Vacancy
PQ:nl 8/16/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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