BILL ANALYSIS �
AB 1129
Page 1
Date of Hearing: April 13, 2011
ASSEMBLY COMMITTEE ON INSURANCE
Jose Solorio, Chair
AB 1129 (Portantino) - As Introduced: February 18, 2011
SUBJECT : Employment information: student loan guaranty
agencies
SUMMARY : Allows the Director of the Employment Development
Department (EDD) to share information with a designated student
loan guaranty agency with an operating agreement with the
California Student Aid Commission. Specifically, this bill:
1)Authorizes the Director of EDD to provide a federally
designated student loan guaranty agency for California,
pursuant to an operating agreement with the California Student
Aid Commission, with information concerning any individuals
who are or have been:
a) Directed by state mandate or court order to pay
restitution, fines, penalties, assessments, or fees as a
result of a violation of law.
b) Delinquent or in default on guaranteed student loans or
who owe repayment of funds received through other financial
assistance programs administered by those agencies.
1)Specifies that the Director of EDD shall not release to this
student loan guaranty agency any UI benefit information.
EXISTING LAW :
1)Authorizes the Director of EDD to permit the use of
information in his or her control, including payroll
information, for specified purposes including determining
unemployment insurance (UI) benefits and employer tax
contribution rates.
2)Authorizes the Director of EDD to provide federal, state, or
local governmental departments or agencies with information
concerning individuals who are or have been:
a) Directed by state mandate or court order to pay
restitution, fines, penalties, assessments, or fees as a
AB 1129
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result of a violation of law.
b) Delinquent or in default on guaranteed student loans or
who owe repayment of funds received through other financial
assistance programs administered by those agencies.
1)Specifies that the Director of EDD shall not release to these
governmental agencies any UI benefit information in connection
with guaranteed student loans or financial assistance programs
administered by other agencies.
FISCAL EFFECT : Undetermined.
COMMENTS :
1)Background. The author states that prior to November 1, 2010,
the federally designated guaranty agency for California was
the California Student Aid Commission (Commission), a state
agency. The Commission administered the state's student loan
guaranty program through its 501(c)(3) auxiliary, EdFund. The
author notes that EdFund was able to access the EDD data for
purposes of skip tracing in order to find and contact
borrowers approaching delinquency or default. EdFund was able
to access the data through an agreement between the Commission
and EDD.
The author states that in 2010 the U.S. Department of Education
terminated the Student Aid Commission's guaranty agreement and
transferred the student loan portfolio to the Educational
Credit Management Corporation (ECMC). ECMC has established a
California location and currently has an operating agreement
with the Commission to provide services and support to the
Commission's operations and administration of the Cal Grant
Program, as well as other state and federal financial aid
programs administered by the Commission.
2)Support. The author states that this bill is needed to allow
the ECMC to access the same skip tracing service that EdFund
was formerly utilizing as a result of its status as an
auxiliary to the California Student Aid Commission.
The author and the Commission state that as part of the transfer
AB 1129
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of the Commission's student loan portfolio to ECMC by the U.S.
Department of Education, the Commission was able to obtain a
commitment that a portion of the revenues generated by the
transferred portfolio would be returned to the Commission to
support the Cal Grant Program. The data that EDD would be
able to provide to ECMC under this bill would enable ECMC to
recover additional funds from delinquent borrowers. According
to the Commission, another benefit of the service through EDD
is that ECMC will be able to find delinquent borrowers in a
timely manner and provide them with services that would assist
them in avoiding default all together.
REGISTERED SUPPORT / OPPOSITION :
Support
California Student Aid Commission
Opposition
None received.
Analysis Prepared by : Manny Hernandez / INS. / (916) 319-2086