BILL ANALYSIS
SB 968
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Date of Hearing: August 4, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 968 (Negrete McLeod) - As Amended: April 26, 2010
Policy Committee: Insurance
Vote:8-4
Urgency: No 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 and continue to
receive unemployment insurance (UI) benefits. Specifically, this
bill:
1)Establishes automatic eligibility for training benefits if
specified criteria apply, regardless of whether the person
applies to EDD.
2)Deletes current law requirements related to eligibility
determinations and instead specifies an unemployed individual
able to work is eligible to receive training if the claimant
certifies he or she is enrolled in a training program that
meets criteria established by this bill.
3)Eliminates the requirement to apply for a determination of
potential eligibility no later than the 16th week of receiving
unemployment benefits and entitles an individual to a training
extension on his or her unemployment insurance claim to
complete approved training.
FISCAL EFFECT
1)Costs of $3 million to $6 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
provides up to 26 additional weeks of unemployment insurance
benefits to allow individuals to enhance professional skills
SB 968
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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 reduces 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 enable more workers to
obtain job training while unemployed.
2)Background . The CTB allows eligible UI claimants who lack
competitive job skills to receive 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 . AB 2058 (Block), in the current session,
contains similar provisions to reduce barriers to enrollment
in CTB. SB 2058 is pending on the Suspense File of the Senate
Appropriations Committee.
SB 968
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Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081