BILL ANALYSIS
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THIRD READING
Bill No: SB 968
Author: Negrete McLeod (D)
Amended: 4/26/10
Vote: 21
SENATE LAB. & INDUS. REL. COMMITTEE : 4-2, 3/24/10
AYES: DeSaulnier, Ducheny, Leno, Yee
NOES: Wyland, Hollingsworth
SENATE APPROPRIATIONS COMMITTEE : 7-3, 5/27/10
AYES: Alquist, Corbett, Kehoe, Leno, Price, Wolk, Yee
NOES: Denham, Walters, Wyland
NO VOTE RECOREDED: Cox
SUBJECT : Unemployment insurance: training and retraining
benefits
SOURCE : Author
DIGEST : This bill makes changes to the current
eligibility and determination requirements necessary for
approval to participate in the California Training Benefits
program.
ANALYSIS : Existing law establishes the Unemployment
Insurance (UI) program administered by the Employment
Development Department (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. The UI program is financed
CONTINUED
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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.
To be eligible for unemployment insurance benefits an
applicant must meet specific eligibility requirements that
include:
1. Having received enough wages during the base period to
establish a claim.
2. Being totally or partially unemployed.
3. Being unemployed through no fault of his/her own.
4. Being physically able to work, be seeking work, and be
immediately available to accept work.
5. Meeting eligibility requirements for each week benefits
are claimed.
6. Being approved for training before training benefits are
paid.
Existing law, until January 1, 2015, provides for
retraining benefits to eligible individuals pursuant to the
federal Trade Act of 1974, as amended by the federal Trade
Act of 2002. Existing law authorizes an unemployed
individual who files a claim for unemployment compensation
benefits or extended duration benefits, or an application
for federal-state extended benefits or any federally funded
unemployment compensation benefits, to apply to the EDD 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, which might not otherwise be allowed, while
attending a training or retraining program approved by the
EDD. Claimants attending an approved training course are
not required to look for work, be available for work or
accept work while in training.
Under the required application process, the EDD schedules a
phone interview with the applicant to determine his/her
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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.
Training can be approved if it meets the following
criteria:
1. Authorized training provided by a special government
program such as:
A. Workforce Investment Act (WIA).
B. Employment Training Panel (ETP).
C. Trade Adjustment Assistance (TAA).
D. California Work Opportunity and Responsibility
to Kids (CalWORKs).
2. Other training not authorized by one of the above
programs but determined by EDD to be eligible. Among
other things, the selected 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.
This bill establishes the California Training Benefits
Program to do the following:
1. Specifies that an unemployed person shall be
automatically eligible for training and retraining
benefits, regardless of whether the person applies to
the EDD for a determination of potential eligibility if
specified criteria apply, or if EDD makes a
determination of eligibility.
2. Deletes provisions of existing law that require 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 unemployment insurance claim
form for benefits that he/she is enrolled in a training
program designed to increase or improve his/her job
skills and employability, and lists a responsible person
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connected with the training/retraining program which
certifies that the person is enrolled and is
satisfactorily pursuing the training/retraining program.
3. Eliminates the requirement that a person apply for a
determination of potential eligibility no later than the
16th week of his/her receiving unemployment benefits,
and instead, requires that any unemployed person
receiving such benefits be entitled to a training
extension on his/her unemployment insurance claim, if
necessary, to complete approved training.
Related Legislation
AB 2058 (Block) of 2009-2010, which is very similar to this
bill; however, it deems a UI recipient to be automatically
eligible for benefits during a period of training or
retraining. In addition, it requires that if the director
determines that the average state unemployment rate, as
specified, equals or exceeds eight and one-half percent,
recipients of unemployment compensation benefits are also
eligible to participate in training or retraining programs.
Currently in Assembly Appropriations Committee.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee analysis:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12
2012-13 Fund
Expansion of training Unknown,
multi million dollar costs
Special*
benefits annually
EDD administration Unknown,
likely significant admin. Special**
savings annually
* Unemployment Fund
** Unemployment Administration Fund
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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.
SUPPORT : (Verified 5/25/10)
California Labor Federation, AFL-CIO
California Workforce Association
OPPOSITION : (Verified 5/25/10)
California Chamber of Commerce
California Manufacturers and Technology Association
ARGUMENTS IN SUPPORT : According to proponents,
California is facing a job loss crisis with unemployment at
historic highs. One of the benefits available to the
unemployed is the CTB program that allows those receiving
UI compensation to participate in an "approved" training
program, however, proponents argue that the definition of
"approved" training has limited the number of training
programs that individuals can attend and has made it
difficult for UI recipients to qualify for the CTB program.
The author's office argues that despite the availability
of benefits, including the recent injection of funds from
the American Recovery and Reinvestment Act, EDD's
inefficient internal operations and its inability to
determine eligibility in a timely manner has caused
significant delays in assistance for displaced workers.
Proponents believe that this bill removes barriers so that
unemployed individuals can get the training they need
without losing the benefits that keep them afloat.
In addition, proponents argue that the U.S. Department of
Labor issued two guidance letters in 2009 strongly
encouraging states to review and revise their policies and
procedures on approved training programs for the unemployed
that included, among other things, to widen the types of
training that qualify as "approved training" and to
streamline the approval process in order for applicants to
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access training programs without losing their benefits.
Proponents argue that this bill conforms California's
Unemployment Insurance code to these federal guidelines by
revising current eligibility provisions.
Lastly, the author's office argues that due to current law
and EDD practices, the CTB program is underutilized and
many displaced workers are not fully aware of their
benefits. This bill also requires EDD to disseminate
information about training benefits on-line in order to
increase the ability to UI recipients to learn about and
access training to prepare them for an economic recovery.
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
unless it is amended because it broadly expands
unemployment insurance benefits for enrollment in any
training or education.
Opponents argue that 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 argue that current law clearly
and appropriately sets out reasonable criteria for eligible
enrollment in job training, and argue that expanding
eligibility for benefits during training, as the bill seeks
to do, would create a far more expansive public policy than
what they believe is the intent of the UI program.
Opponents argue that this bill reaches further beyond
timely delivery of benefits and proposes to automatically
approve enrollment in all training and retraining programs
when the individual merely certified that training is
"designed to increase or improve his/her job skills and
employability." Opponents argue that without specificity
and verifiable standards, this certification process opens
the door to not only fraud and abuse, but also establishes
a very different public policy.
PQ:do 5/27/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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