BILL NUMBER: SB 1566 CHAPTERED BILL TEXT CHAPTER 544 FILED WITH SECRETARY OF STATE SEPTEMBER 15, 2002 APPROVED BY GOVERNOR SEPTEMBER 13, 2002 PASSED THE SENATE AUGUST 27, 2002 PASSED THE ASSEMBLY AUGUST 25, 2002 AMENDED IN ASSEMBLY AUGUST 23, 2002 AMENDED IN ASSEMBLY JUNE 18, 2002 AMENDED IN SENATE APRIL 18, 2002 AMENDED IN SENATE APRIL 1, 2002 INTRODUCED BY Senator Polanco (Coauthors: Senators O'Connell, Scott, Sher, and Vincent) FEBRUARY 20, 2002 An act to amend Sections 88500, 88510, 88515, 88520, 88525, 88530, 88531, 88540, 88542, 88543, 88550, and 88551 of, and to amend the heading of Part 52 (commencing with Section 88500) of, the Education Code, relating to community colleges. LEGISLATIVE COUNSEL'S DIGEST SB 1566, Polanco. California Community Colleges Economic and Workforce Development Program. Existing law provides for the California Community Colleges Economic Development Program. Existing law provides for the awarding of grants for this program. Existing law provides that this program only be implemented during those fiscal years for which funds are appropriated for these purposes in the annual Budget Act. Existing law establishes the California Community Colleges Business Resource Assistance and Innovation Network Trust Fund in the State Treasury as a special fund administered by the Board of Governors of the California Community Colleges, and authorizes the board of governors to solicit direct contributions for deposit in the fund from various nonstate public and private sources for the purpose of funding the program for allocation upon appropriation by the Legislature. Existing law provides for the repeal of the program on January 1, 2003. This bill would state the intent of the Legislature to reauthorize the program as the California Community Colleges Economic and Workforce Development Program, and would make related changes to the program. The bill would provide that funds be awarded on a competitive basis. The bill would provide that this program only be implemented during those fiscal years for which funds are appropriated for these purposes in the annual Budget Act. The bill would require that the special funds in the California Community Colleges Business Resource Assistance and Innovation Network Trust Fund be placed in a surplus money investment account to earn interest for program purposes. The bill would require that an annual report about the program required by existing law to be provided on or about each January 1 by the Chancellor of the California Community Colleges instead be provided on or about March 1 of each year. The bill would extend the date on which the program is to be repealed to January 1, 2008. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares all of the following: (a) The Association of American Community Colleges, in its study "2001 Community Colleges in the Knowledge Economy," found all of the following: (1) The sectors of the economy with the most educated workers are growing the fastest, increasing the demand for credentials and degrees. In 1998, 86 percent of prime-age, high-tech workers had attended a postsecondary institution, up from more than 60 percent in 1973. Nineteen percent of high-tech workers in 1998 had coursework but no degree, while 15 percent had associate degrees and more than one-half had bachelor's degrees. Health care, business services, and related fields have similar requirements. (2) Ultimately, successful careers are best guaranteed by degree education beyond high school and long-term access to general and job-specific learning. Community colleges are ideally positioned to continue to evolve with these trends as both academic and vocational credentials multiply, and as the line between academic and applied learning blurs. (3) The United States Office of Vocational and Adult Education, in a study, "Turning Skills into Profit: Economic Benefits of Workplace Education Programs," found that more than 40 percent of the U.S. workforce and more than 50 percent of high school graduates do not have the basic skills needed to do their jobs. (b) The California Economic Strategy Panel has concluded that California's new economy is an economy of regions, driven by various industry clusters or concentrations of firms with potential for creating and sustaining regional wealth. The panel noted that regions are not defined by political boundaries, but by common economic interests. (c) The California Community Colleges Economic Development Program, through its various industry support programs, has demonstrated its capacity as an essential component of the region-by-region infrastructure that will be required to sustain the competitiveness of California's new economy. This capacity and positive outcomes have been validated in several consecutive annual program evaluation reports since the program's inception. (d) The California Community Colleges Economic Development Program, first established by statute in 1991, is an extensive statewide planning process, utilizing a broad range of representatives from community colleges, businesses, and workers. The program resulted in the adoption of a statewide strategic plan for community college participation in California's economic growth. (e) Regional workforce development and business resource assistance plans, including resources for nonprofits, have been developed and adopted for each designated region of the state. These plans provide an assessment of workforce and business development needs and rapid response strategies for community colleges. This comprehensive program represents a well-planned network of services focused on meeting the needs of business and the incumbent workforce in each major economic region of California in a timely and flexible manner. The program's initiative areas and short-term grants have benefited new workforce entrants, current workers, faculty, colleges, and employers. (f) Economic development was added by the Legislature to the statutory mission of the California Community Colleges by Chapter 1057 of the Statutes of 1996. The incorporation of economic development into the mission of California Community Colleges has increased the system's active support of regional economic development. SEC. 2. In adding this section, it is the intent of the Legislature to reauthorize the program as the California Community Colleges Economic and Workforce Development Program, so as to maximize the program's capacity and mission to provide critical support for continuous workforce improvement and economic development in a manner that is adaptive and responsive to the changing needs of regional economies. SEC. 3. The heading of Part 52 (commencing with Section 88500) of the Education Code is amended to read: PART 52. CALIFORNIA COMMUNITY COLLEGES ECONOMIC AND WORKFORCE DEVELOPMENT PROGRAM SEC. 4. Section 88500 of the Education Code is amended to read: 88500. The mission of the economic and workforce development program, subject to approval and amendment by the Board of Governors of the California Community Colleges, shall include, but not necessarily be limited to, all of the following: (a) To advance California's economic growth and global competitiveness through high quality education and services focusing on continuous workforce improvement, technology deployment, and business development, consistent with the current needs of the state' s regional economies. (b) To maximize and leverage the resources of the California Community Colleges to fulfill its role as the primary provider in fulfilling the vocational education and training needs of California business and industry. (c) To work with representatives of business, labor, and professional trade associations to explore and develop new alternatives for assisting incumbent workers. A key objective is to enable incumbent workers to become more competitive in their region's labor market, increase competency, and identify career paths to economic self-sufficiency and lifelong access to good-paying jobs. This includes, but is not necessarily limited to, career ladder approaches. (d) To collaborate with other state and local agencies, including partners under the federal Workforce Investment Act of 1998 (Public Law 105-220), and the Technology, Trade, and Commerce Agency, to deliver services that meet statewide and regional workforce, business development, technology transfer, and trade needs that attract, retain, and expand businesses. (e) To develop, in consultation with the Economic Strategy Panel of the Technology, Trade, and Commerce Agency, local economic development agencies, the private sector, and labor and community groups, innovative solutions, as needed, in identified strategic priority areas, including, but not necessarily limited to, advanced transportation, biotechnology, small business, applied competitive technologies, including computer integrated manufacturing, production and continuous quality improvement, business and workforce improvement, environmental technologies, health care delivery, multimedia/entertainment, international trade, and workplace literacy. Strategic priority areas that may be explored if new or additional funding becomes available may include information technology, e-commerce and e-trade, and nanotechnology. (f) To identify, acquire, and leverage community college and other vocational training resources when possible, to support local, regional, and statewide economic development. (g) To create effective logistical, technical, and marketing infrastructure support for economic development activities within the California Community Colleges. (h) To optimize access to community colleges' economic development services. (i) To develop strategic public and private sector partnerships. (j) To assist communities experiencing military base downsizing and closure. SEC. 5. Section 88510 of the Education Code is amended to read: 88510. (a) The Board of Governors of the California Community Colleges and the Chancellor of the California Community Colleges may award grants to districts for leadership in accomplishing the mission and goals of the economic and workforce development program, as described in Section 88500. (b) (1) The board of governors shall establish an advisory committee for the California Community Colleges Economic and Workforce Development Program and determine the membership, pursuant to paragraph (2). The advisory committee shall guide overall program development, recommend resource development and deployment, and recommend strategies for implementation and coordination of regional business resources. Based on new funding and information developed by the Chancellor of the California Community Colleges pursuant to subdivision (d) and forwarded to the advisory committee, the advisory committee shall make recommendations to the chancellor and the board of governors on whether new initiatives should be undertaken, and whether existing initiatives should continue to be funded at their existing levels, their funding increased or decreased, or their funding terminated. (2) The membership of the advisory committee shall include representatives from labor; business; appropriate state agencies, including the Technology, Trade, and Commerce Agency; a faculty representative; a classified employee representative; and one community college chief executive officer representative from each of the 10 regions of the California Community Colleges Economic and Workforce Development Program. (3) The advisory committee shall be organized so that its work is workforce and business development driven, each leveraging the other to achieve economic development. (c) The decision criteria for allocating funds to colleges shall take into account all of the following: (1) Regional workforce and business development needs. (2) Emerging industries, labor market growth sectors, and gaps in service provided by the community colleges of a region, as identified by the current regional business resource, assistance, and innovation network infrastructure with identified strategic priority areas. (3) Performance of the college or district in the administration and achievement of proposed results of recently awarded economic development projects. (4) For service delivery projects, the cost of organizing, administering, and delivering proposed services relative to the number of clients to be served and the expected benefits. For capacity building projects, showing how the capacity of the college is improved in order to deliver services to employers and students. (5) Demonstrated benefit to the college and faculty resulting from the services provided for in subdivisions (a), (b), (c), (h), and (j) of Section 88531. (d) The chancellor's office shall provide systemwide oversight and evaluation of the economic and workforce development program. (e) The chancellor may establish program requirements and performance standards in the administration of the economic and workforce development program and distribute funds as appropriate to implement the program. (f) The chancellor may provide technical assistance to community colleges for the purpose of improving the competitiveness of their proposals. (g) Funds shall be awarded for the program on a competitive basis. (h) The chancellor, in awarding short-term competitive funds, shall take into account colleges in economically distressed urban and rural areas, and colleges that have not previously been successful in the competitive bid process. SEC. 6. Section 88515 of the Education Code is amended to read: 88515. This part shall be implemented only during those fiscal years for which funds are appropriated for the purposes of this part in the annual Budget Act. SEC. 7. Section 88520 of the Education Code is amended to read: 88520. The following definitions govern the construction of this part: (a) "Business Resource Assistance and Innovation Network" means the network of projects and programs that comprise the California Community Colleges Economic and Workforce Development Program. (b) "California Community Colleges Economic and Workforce Development Program," "economic and workforce development program," and "EDNet Program" mean the program. (c) "Center" means a comprehensive program of services offered by one or more community colleges to an economic region of the state in accordance with criteria established by the board of governors for designation as an economic and workforce development program center. Center services shall be designed to respond to the statewide strategic priorities pursuant to the mission of the community colleges' economic and workforce development program, and to be consistent with programmatic priorities, targeted industries, identified economic development, vocational education, business development, and continuous workforce training needs of a region as identified by regional business resource, assistance, and innovation network infrastructure plans. Centers shall provide a foundation for the long-term sustained relationship with businesses, labor, and colleges in the region. They shall support, develop, and deliver direct services to businesses, colleges, labor organizations, employees, and employers. Direct services shall include curriculum development, faculty training, assessment, one-on-one counseling, seminars, workshops, conferences, training, technology transfer, and educational services. Centers shall provide developmental and delivery support and technical assistance to colleges within their regions as needed to meet the business and workforce education and training needs in their districts. (d) "Industry cluster" means a geographic concentration or emerging concentration of interdependent industries with direct service, supplier, and research relationships, or independent industries that share common resources and sell a significant portion of their goods or services outside of the region. (e) "Industry-driven regional collaborative" means a regional public, private, or other community organizational structure that jointly defines priorities, delivers services across programs, sectors, and in response to, or driven by, industry needs. The industry-driven regional collaborative projects meet the needs and fill gaps in services that respond to regional business, employee, and labor needs. These service-delivery structures offer flexibility to local communities and partners to meet the identified needs in an economic development region. Industry-driven regional collaboratives are broadly defined to allow maximum local autonomy in developing projects responding to the needs of business, industry, and labor. Industry-driven regional collaborative services respond to the statewide strategic priority pursuant to the mission of the community colleges economic and workforce development program, and are consistent with the programmatic priorities, targeted industries, identified economic development, vocational education, and continuous workforce training needs of a region as identified by regional business resource, assistance, and innovation network infrastructure plans. (f) "Initiative" is an identified strategic priority area that is organized statewide, but is a regionally based effort to develop and implement innovative solutions designed to facilitate the development, implementation, and coordination of community college economic development and related programs and services. Each initiative shall be workforce and business development driven by a statewide committee made up of community college faculty and administrators and practitioners and managers from business, labor, and industry. Centers, industry-driven regional collaboratives, and other economic and workforce development programs performing services as a part of the implementation of an initiative shall coordinate services statewide and within regions of the state as appropriate. (g) "Job development incentive training" means programs that provide incentives to employers to create entry-level positions in their businesses, or through their suppliers or prime customers, for welfare recipients and the working poor. (h) "Living wage" means family or personal incomes at or above 250 percent of the poverty level, based on United States Census Bureau data for the region. This definition may be amended upon review of current data and recommendation of the California Community Colleges Economic and Workforce Development Program Advisory Committee and approval of the board of governors. (i) "Matching resources" means any combination of public or private resources, either cash or in-kind, derived from sources other than the economic and workforce development program funds appropriated by the annual Budget Act, that are determined to be necessary for the success of the project to which they are applied. The criteria for in-kind resources shall be developed by the board of governors, with advice from the chancellor and the California Community Colleges Economic and Workforce Development Program Advisory Committee, and shall be consistent with generally accepted accounting practices for state and federal matching requirements. The ratio of matching resources to economic and workforce development program funding shall be determined by the board of governors. (j) "Performance improvement training" means training delivered by a community college that includes all of the following: (1) An initial needs assessment process that identifies both training and nontraining issues that need to be addressed to improve individual and organizational performance. (2) Consultation with employers to develop action plans that address business or nonprofit performance improvements. (3) Training programs that link individual performance requirements with quantifiable business measures, resulting in demonstrable productivity gains, and, as appropriate, job retention, job creation, or improvement in wages or living wages. (k) "Region" means a geographic area of the state defined by economic and labor market factors containing at least one industry cluster and the cities, counties, or community college districts, or all of them, in the industry cluster's geographic area. For the purposes of this chapter, "California Community College economic development regions" shall be designated by the board of governors based on factors, including, but not necessarily limited to, all of the following: (1) Regional economic development and training needs of business and industry. (2) Regional collaboration, as appropriate, among community colleges and districts, and existing economic development, continuous workforce improvement, technology deployment, and business development. (3) Other state economic development definitions of regions. SEC. 8. Section 88525 of the Education Code is amended to read: 88525. The California Community Colleges Business Resource Assistance and Innovation Network Trust Fund is hereby established in the State Treasury as a special fund administered by the board of governors. The board of governors may solicit direct contributions for deposit in the fund from various nonstate public and private sources for the purpose of funding the California Community Colleges Economic and Workforce Development Program. Special funds in the trust shall be placed in a surplus money investment account to earn interest. Interest generated by funds deposited in this trust fund shall be reinvested in the fund, and may only be used to fund eligible projects and activities of the economic and workforce development program and related board of governors initiatives. Upon appropriation by the Legislature, the fund may be expended for purposes of administering grants and contracts for providing services, through the program, to public and private entities. SEC. 9. Section 88530 of the Education Code is amended to read: 88530. (a) It is the intent of the Legislature that the programs and services provided through the EDNet Program shall be flexible and responsive to the needs identified through the statewide and regional planning process. Services shall be demand-driven, and delivery structures shall be agile, performance-oriented, cost-effective, and contribute to regional economic growth and competitiveness. The use of economic and workforce development program centers, local economic development corporations, industry-driven regional collaboratives, and business networks, employers, and service providers shall provide a stable and flexible response mechanism for the identification of training priorities and to focus resources on short-term intensive projects for high growth sectors. These networks shall have the flexibility to meet the demand for new and emerging growth sectors and be formed, modified, eliminated, and reformed for short- or long-term responses customized to the duration of the need. Programs and projects developed and implemented at centers and industry-driven regional collaborative projects may act as catalysts for future vocational education programs in the system. (b) It is the intent of the Legislature that centers shall be established as the long-term structure of the network's service delivery system. Centers shall provide regional sites to efficiently respond to employer and worker needs, and shall deliver services for the strategic initiative areas pursuant to the mission of the community colleges economic and workforce development program. (c) It is the intent of the Legislature that industry-driven regional collaboratives perform services as participants of regional networks. Grants by industry-driven regional collaboratives shall provide flexibility for local projects to assess and define their individual project needs. New local programs and equipment shall be key components of these grants. Funding shall not be limited per project, but shall be based on the merit and reasonable cost for the anticipated outcomes and performance of the project. Funding for industry-driven regional collaboratives shall be limited to two consecutive fiscal years. SEC. 10. Section 88531 of the Education Code is amended to read: 88531. Economic and workforce development program centers and California Community College participation in industry-driven regional collaboratives may provide any or all of the following services and perform the following functions as participants of networks, including, but not necessarily limited to, all of the following: (a) Curriculum development, design, and modification that contribute to workforce skill development common to industry clusters within a region. (b) Development of instructional packages focusing on the technical skill specific to emerging occupations in targeted industries and growing industry clusters. (c) Faculty mentorships, faculty and staff development, in-service training, and worksite experience supporting the new curriculum and instructional modes responding to identified regional needs. (d) Institutional support, professional development, and transformational activities focused on removing systematic barriers to the development of new methods, transition to a flexible and more responsive administration of programs, and the timely and cost-effective delivery of services. (e) The deployment of new methodologies, modes, and technologies that enhance performance and outcomes and improve cost effectiveness of service delivery or create new college programs. (f) One-on-one counseling, seminars, workshops, and conferences that contribute to the achievement of the success of existing business and foster the growth of new business and jobs in emerging industry clusters. (g) The delivery of performance-improvement training, which shall be provided on a matching basis to employers to benefit workforce participants. This will promote continuous workforce improvement in identified strategic priority areas, identified industry clusters, or areas targeted in the regional business resource assistance and innovation network plans. (h) Credit and noncredit programs and courses that contribute to workforce skill development common to industry clusters within a region or that focus on the technical skills specific to emerging occupations in targeted industries and growing industry clusters, as identified by regional needs assessment. (i) Subsidized student internships on a cash or in-kind matching basis for program participants in occupational categories determined to be consistent with the skill clusters necessary to be successful in the identified strategic priority areas, identified industry clusters, or areas targeted by network infrastructure plans. (j) Acquisition of equipment to support the eligible activities and the limited renovation of facilities to accommodate the delivery of eligible services. SEC. 11. Section 88540 of the Education Code is amended to read: 88540. (a) (1) Programs and activities of the Job Development Incentive Training Program shall include a strong partnership with state and local economic development entities, workforce development agencies, community-based organizations, and the private sector. It is the intent of the Legislature that this program provide training on a no-cost or low-cost basis to participating employers who create employment opportunities at an acceptable wage level for the attainment of self-sufficiency by both of the following groups: (A) Recipients of aid under Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code. (B) Clients determined to be eligible because they are employed at a wage too low to attain self-sufficiency. (2) Guidelines for the determination of eligibility under this subdivision shall be developed by the chancellor's office in consultation with the appropriate agencies responsible for collecting appropriate data. A structured career ladder methodology may be implemented in this program area. (3) Funds received from other eligible programs, including, but not necessarily limited to, programs under the federal Workforce Investment Act of 1998 (Public Law 105-220) and other applicable programs selected by the chancellor, or a combination of programs, may be used to provide funds to match job development incentive training funds. (b) It is the intent of the Legislature that the expenditure of funds under this section should lead measurably to the upgrading of highly skilled and technical workers, upgrade opportunities for those who are employed at a wage too low to attain self-sufficiency, and the creation of jobs for new entrants into the workforce. SEC. 12. Section 88542 of the Education Code is amended to read: 88542. Matching fund requirements shall be waived for employers who receive training services through the Job Development Incentive Training Program and who accomplish either of the following: (a) Create employment opportunities for recipients of aid under Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code at an acceptable wage level to attain self-sufficiency. (b) Create opportunities for individuals working at a low wage to upgrade to a wage adequate to attain self-sufficiency. SEC. 13. Section 88543 of the Education Code is amended to read: 88543. Each community college that participates in the Job Development Incentive Training Program shall inventory its local or regional business community, including nonprofit organizations, and identify industry-driven needs and employment opportunities with a goal of attaining self-sufficiency through workforce reentry, continuous employee training, and skills upgrades. SEC. 14. Section 88550 of the Education Code is amended to read: 88550. (a) The chancellor shall implement accountability measures that provide the Governor, Legislature, and general public with accountability measurements of the program that quantify both employer and student outcomes and seek to specifically isolate the impact of the EDNet Program on participants. (b) The chancellor shall submit a report to the Governor and Legislature on or about March 1 of each year. Sufficient information shall be provided in the report to ensure the understanding of the magnitude of expenditures, by type of expenditure, including those specified in Section 88525, disaggregated by industry cluster and region. The report shall also include the marketing efforts conducted, the type of services provided to colleges and employers, and the number of businesses, students, and employees served, and identify the benchmarks and indicators used to demonstrate the results achieved. SEC. 15. Section 88551 of the Education Code is amended to read: 88551. This part shall remain in effect only until January 1, 2008, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2008, deletes or extends that date.