BILL ANALYSIS �
AB 1556
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Date of Hearing: April 9, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1556 (Perea) - As Amended: March 17, 2014
Policy Committee: InsuranceVote:8-2
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill codifies several changes to policies and practices of
the Employment Development Department (EDD) related to
unemployment and disability claims. Specifically, this bill:
1)Requires EDD to translate webpages and key documents in
additional languages.
2)Prohibits EDD from automatically halting the payment of
unemployment insurance (UI) benefits and requiring a
redetermination of eligibility when a claimant begins a
training or education program.
3)Prohibits EDD from automatically halting the payment of UI
benefits and requiring a redetermination of eligibility until
a claim certification form is more than 21 days late.
4)Requires the EDD director to periodically review the UI
program to identify policies and practices that delay benefit
payments, increase EDD workload, and provide little or no
value in identifying or preventing fraud in the UI program.
Requires EDD to provide the first review to the Legislature by
July 1, 2015.
FISCAL EFFECT
Overall, this bill reflects current practice and has negligible
additional state costs.
Aside from the periodic review required in (4) above, the
changes in business practices codified by this bill are already
in various stages of implementation by EDD, as documented in two
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letters to the Assembly Insurance Committee dated January 7 and
March 25, 2014. As the costs of these changes are already being
absorbed by EDD under their current administrative budget, no
additional fiscal impact is expected.
EDD may incur some additional costs to conduct the periodic
review and report as specified in the bill; however, as EDD
performs reviews of efficiency and effectiveness in the UI
program on an ongoing basis, these costs should also be minor
and absorbable within EDD's current administrative budget.
COMMENTS
1)Purpose . This bill ensures that policy changes implemented by
EDD as a result of a November 6, 2013 oversight hearing of the
Assembly Insurance Committee are reflected in statute, and
requires that EDD work to increase the efficiency of the UI
program on an ongoing basis. The oversight hearing focused on
severe performance and customer service issues encountered in
September 2013 after EDD deployed a new computer system. EDD
has since implemented numerous changes in order to improve the
UI system, and the department maintains it is committed to
continuous assessment and improvement.
2)Continuous Appropriation . The Legislative Counsel digest
states this bill would "make changes to existing eligibility
requirements for unemployment compensation benefits that would
result in additional amounts being payable from the
Unemployment Fund." Since the UI fund is continuously
appropriated, the bill is tagged as making an appropriation.
However, this bill does not appear to actually change
eligibility criteria. Instead, it codifies a current EDD
business practice related to eligibility redetermination when
an individual has enrolled in a training program. Previously,
benefits for a claimant who stated he or she began a training
program were automatically terminated and the claimant was
forced into a redetermination process. Existing law already
prohibits an unemployed individual from being disqualified for
benefits solely on the basis that he or she is a student.
Consistent with existing law, the new process used by EDD only
flags a claimant for redetermination if they indicate they
were not able to accept full-time work in connection with
beginning a training program. This change, which is codified
in general terms by this bill, has reduced the number of cases
for which an eligibility determination is automatically
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triggered. It does not, however, appear to change eligibility
rules. In practical terms, it may reduce inappropriate
terminations of benefits and result in some administrative
cost savings from fewer unnecessary redeterminations.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081