Bill Text: CA AB2570 | 2021-2022 | Regular Session | Amended

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Bill Title: Unemployment insurance: Unemployment Fund.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2022-05-19 - In committee: Held under submission. [AB2570 Detail]

Download: California-2021-AB2570-Amended.html

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Amended  IN  Assembly  March 24, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill

No. 2570

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Introduced by Assembly Member Daly

February 18, 2022

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An act to amend Section 606 of the Unemployment Insurance Code, relating to unemployment insurance. insurance, and making an appropriation therefor.

LEGISLATIVE COUNSEL'S DIGEST

AB 2570, as amended, Daly. Unemployment insurance. insurance: Unemployment Fund.

Existing law establishes the Unemployment Fund as a continuously appropriated fund separate and apart from all other public money or funds of the state. The fund is administered by the Director of Employment Development exclusively for the purposes of carrying out the unemployment and disability insurance programs.

This bill would make a one-time transfer of $7,250,000,000 from the General Fund to the Unemployment Fund for the purpose of paying down outstanding debt in that fund. By transferring moneys from the General Fund into a continuously appropriated fund, this bill would make an appropriation. The bill would also make findings and declarations related to this appropriation.

Under existing law governing unemployment compensation, each individual employed to perform or to assist in performing the work of any individual employed by an employing unit is deemed to be employed by that employing unit for purposes of unemployment compensation, whether or not the individual was hired or paid directly by the employing unit if the employing unit had actual or constructive knowledge of the work.

This bill would make a nonsubstantive change to that provision.

Digest Key

Vote: MAJORITY2/3   Appropriation: NOYES   Fiscal Committee: NOYES   Local Program: NO  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 (a) The Legislature finds and declares all of the following:

(1) For safety reasons related to the COVID-19 pandemic, the State of California ordered the shutdown of many businesses which forced those businesses to lay off some of their employees.

(2) The Unemployment Fund was solvent before the COVID-19 pandemic.

(3) The Unemployment Fund provides important benefits that helped many Californians survive through the pandemic when their workplaces were shut down.

(4) The economic shutdown caused the Unemployment Fund to fall deep into insolvency, with present insolvency beyond nineteen billion dollars ($19,000,000,000).

(5) Deep insolvency will lead to ongoing tax increases for employers in California beginning in 2023.

(6) Deep insolvency imposes costs upon the State of California because the state pays interest on unemployment insurance debt, including four hundred seventy million dollars ($470,000,000) proposed in the Governor’s budget.

(7) A one-time investment of seven billion two hundred fifty million dollars ($7,250,000,000) to pay down the debt in the Unemployment Fund will go a long way toward decreasing the total interest owed by the state on this debt and help support the state’s overall fiscal stability in the future.

(b) The Controller shall transfer the sum of seven billion two hundred fifty million dollars ($7,250,000,000) from the General Fund to the Unemployment Fund for the purpose of paying down the debt in the Unemployment Fund.

SECTION 1.Section 606 of the Unemployment Insurance Code is amended to read:

606.

Each individual employed to perform or to assist in performing the work of any individual employed by an employing unit shall be deemed to be employed by that employing unit for all the purposes of this division, whether or not the individual was hired or paid directly by the employing unit if the employing unit had actual or constructive knowledge of the work.