BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
968 (Negrete McLeod)
Hearing Date: 5/27/2010 Amended: 4/26/2010
Consultant: Bob Franzoia Policy Vote: L&IR 4-2
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BILL SUMMARY: SB 968 would establish the California Training
Benefits Program to do the following:
- Specify that an unemployed person shall be automatically
eligible for training and retraining benefits, regardless of
whether the person applies to the Employment Development
Department (EDD) for a determination of potential eligibility if
specified criteria apply, or if EDD makes a determination of
eligibility.
- Delete provisions of existing law that require the
determination of potential eligibility and instead specify that
an unemployed person who is able to work is eligible to receive
training and retraining benefits if he or she certifies on the
unemployment insurance claim form for benefits that he or she is
enrolled in a training program that meets criteria specified by
this bill, and a responsible person connected with the
training/retraining program certifies that the person is
enrolled and is satisfactorily pursuing the training/retraining
program.
- Eliminate the requirement that a person apply for a
determination of potential eligibility no later than the 16th
week of his or her receiving unemployment benefits and would
instead require that any unemployed person receiving such
benefits be entitled to a training extension on his or her
unemployment insurance claim, if necessary, to complete approved
training.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Expansion of training Unknown, multi million dollar costs
annually Special*
benefits
EDD administration Unknown, likely significant
administrative Special**
savings annually
* Unemployment Fund
** Unemployment Administration Fund
If 500 persons - who would otherwise not be eligible under
current law - continued receiving unemployment insurance
benefits while engaging in a training or retraining program for
the maximum weekly benefits (52 weeks) while receiving the
average weekly benefit ($308), the cost to the Unemployment Fund
would be (500 x 52 x $308) $8,008,000.
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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
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SB 968 (Negrete McLeod)
financed by employers who pay unemployment taxes on the first
$7,000 in wages paid
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 these benefits
regardless of whether the person applies to EDD for a
determination of potential eligibility. The cost to the UF
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 EDD for a
determination of eligibility for UI benefits while receiving
training. Under this bill, a person may automatically be
eligible for the benefits. The fiscal impact of this would be
unknown administrative savings because EDD would no longer have
to make the determination of eligibility.
A claimant who qualifies for the maximum 26 weeks of regular UI
benefits would qualify for 26 additional weeks of training
extension benefits. For example, using the average weekly
benefit amount of $308, this would mean that a claimant would
qualify for a maximum of $8,008 of regular UI benefits, and
another $8,008 of training extension benefits, for a total of
$16,016. The bill would essentially double the impact on the
Unemployment Fund and the tax costs for employers assuming there
are no federal extensions in. How many people will apply for
training is unknown at this time.