BILL ANALYSIS                                                                                                                                                                                                    Ó






                 Senate Committee on Labor and Industrial Relations
                                 Ted W. Lieu, Chair

          Date of Hearing: April 13, 2011              20011-2012 Regular 
          Session                              
          Consultant: Alma Perez                       Fiscal:Yes 
                                                       Urgency: No
          
                                   Bill No: SB 698
                                    Author: Lieu
                         Version: As amended April 6, 2011 
          

                                       SUBJECT
          
                   Workforce development: high-performance boards 


                                      KEY ISSUE

          Should the Legislature establish "high-performing" standards for 
          Local Workforce Investment Boards (Local WIBs) to meet in order 
          to be re-certified by the state every two years? 

          Should the Legislature specify that local WIBs that are not 
          adhering to the "high-performing" standards will not be eligible 
          to receive a portion of the states 15% discretionary funds? 
          

                                       PURPOSE
          
          To establish standards for certification of high-performance 
          Local Workforce Investment Boards to ensure accountability and 
          consistency throughout the state's 49 local WIBs. 


                                      ANALYSIS
          
           The federal Workforce Investment Act (WIA) of 1998  provides for 
          activities and programs for job training and employment 
          investment in which states may participate, including work 
          incentive and employment training outreach programs.  Following 
          passage of the federal WIA, the state established the California 
          Workforce Investment Board (CWIB) and charged the board with the 
          responsibility of developing a unified, strategic planning 
          process to coordinate various education, training, and 









          employment programs into an integrated workforce development 
          system that supports economic development.  

           Existing law  requires the local chief elected officials in a 
          local workforce development area to form, pursuant to specified 
          guidelines, a Local Workforce Investment Board (LWIB) to plan 
          and oversee the workforce investment system at the local level.  
          There are currently 49 local WIBs in the state.  Each local 
          workforce area also created one or more One-Stop Centers, which 
          provide access to career information, counseling, funding for 
          education, training and supportive services.  

           Existing law  further requires the Governor to certify one local 
          board for each local area in the state once every 2 years.  This 
          certification is granted as long as the local WIB meets minimum 
          federal requirements for performance and board composition.  

           Under the federal law  , WIA funds are distributed to the states 
          based on formulas that consider unemployment rates and other 
          economic and demographic factors.  California and its 49 LWIBs 
          receive WIA formula funding from the U.S. Department of Labor 
          through three revenue streams - Adult, Youth, and Dislocated 
          Workers. Under federal law, 85 percent of Adult and Youth 
          formula funds, and 60 percent of Dislocated Worker formula funds 
          are distributed to LWIBs.  Fifteen percent of Adult, Youth, and 
          Dislocated Worker formula funds (15% discretionary funds) are 
          allocated to the state for a variety of discretionary uses.  
           

          This Bill  would require the Governor to establish, through the 
          California Workforce Investment Board, standards for 
          certification of high-performance Local Workforce Investment 
          Boards in accordance with specified criteria.  

          Specifically, this bill would:
             §    Direct the CWIB, in consultation with representatives 
               from local WIBs, to initiate a stakeholder process to 
               determine the appropriate standards for high-performance 
               certification, to occur once every two years. 

             §    Require that the standards be implemented on or before 
               January 1, 2012, with the first certification of 
               high-performance boards to occur on or before January 1, 
          Hearing Date:  April 13, 2011                            SB 698  
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               2013.  

             §    Provide that in order to meet the standards for 
               certification a local board shall, among other things, do 
               the following: 
                  o         Meet or exceed negotiated performance goals, 
                    as specified;
                  o         Develop and implement local policies and a 
                    local strategic plan that, among other things, is 
                    separate from the local plan required under the 
                    federal WIA and is consistent with the CWIB strategic 
                    plan.
                  o         Demonstrate that the local planning process 
                    involves key stakeholders, including the major 
                    employers and industry groups in the relevant regional 
                    economy and organized labor. 
                  o         Demonstrate that the local planning process 
                    considers the entire workforce training pipeline, 
                    including partners in K-12 education, career technical 
                    education, the community college system and other 
                    postsecondary institutions.
                  o         Demonstrate investment in initiatives and 
                    training programs that promote skills development and 
                    career ladders relevant to the needs of each workforce 
                    area.   
                  o         Establish a business service plan that 
                    integrates local business involvement with workforce 
                    initiatives. The plan shall include, among other 
                    things, efforts to partner with business to identify 
                    training and educational barriers to attract jobs, 
                    existing skills gaps and potential emerging 
                    industries. In addition, the plan shall include an 
                    electronic system for both business and job seekers to 
                    communicate about job opportunities. 

             §    Require the Governor to establish the High-Performance 
               Workforce Investment Board Fund and require the CWIB, in 
               consultation with the Governor, to allocate a portion of 
               the federal WIAs 15% discretionary fund to this fund. 
                  o         Only a certified high-performance board shall 
                    be eligible to receive money from the High-Performance 
                    Workforce Investment Board Fund or any portion of the 
                    state's 15% discretionary fund. 
          Hearing Date:  April 13, 2011                            SB 698  
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                                      COMMENTS

          
          1.  Need for this bill?

            The California Workforce Investment Board is responsible for 
            assisting the Governor in the development, oversight, and 
            continuous improvement of California's workforce investment 
            system.  California receives between $400 and $500 million in 
            federal WIA dollars annually.  And in 2008/09, the state 
            received an additional $488.6 million from the American 
            Recovery and Reinvestment Act of 2009. The majority of these 
            funds (85%) are formula allocated to the 49 local WIBs which 
            set policy for how funds are invested locally and provide 
            oversight of employment services delivered.  The rest of the 
            funds (15%) are disseminated at the Governor's discretion. 

            California's 49 local WIBs set local policies and allocate 
            resources to respond to local markets to help struggling 
            unemployed and underemployed workers get and retain good jobs. 

            Currently, local WIBs are certified by the Governor every two 
            years, but this certification process merely requires them to 
            meet minimum federal requirements.  Although many local WIBs 
            provide high quality services, the system does not adhere to 
            any coherent state standards, leaving workers and businesses 
            to face widely varying levels of quality and effectiveness 
            across the state's 49 local WIB jurisdictions.  

            This bill would require the Governor to establish, through the 
            CWIB, standards for certification of high-performance local 
            WIBs, in accordance with specified criteria.  In addition, 
            this bill would also require the Governor to establish the 
            High-Performance Workforce Investment Board Fund and would 
            require the CWIB, in consultation with the Governor, to 
            allocate specified federal discretionary funds to 
            high-performance local workforce investment boards.

          2.  Similar efforts in other states  :

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            Federal law provides states significant latitude to adjust WIA 
            and align it with a broader economic vision. This allows 
            Governors the opportunity to hold local WIBs accountable to 
            additional performance requirements and statewide standards 
            consistent with building a high performing and integrated 
            workforce development system.  Several States have addressed 
            the need to hold local WIBs to higher standards through a 
            process of a second-tier certification process delineating 
            high-performance WIBs. Those states that have implemented, or 
            are in the process of implementing, this certification process 
            includes Kentucky, Missouri, North Carolina, South Carolina, 
            Michigan, and Pennsylvania.   

          3.  Proponent Arguments  :
            
            According to the author, workers in California are 
            experiencing a recession like never before that has left us 
            with a shattered job market and a record setting unemployment 
            rate.  Nonetheless, proponents argue that employers will soon 
            need a skilled workforce to replace the retiring baby boomer 
            generation and meet the demands of new emerging industries.  
            According to the author and proponents, now more than ever, it 
            is crucial that every dollar of federal workforce funds that 
            our state receives is invested in high quality employment 
            services that connect workers to good paying jobs.  

            According to proponents, federal law provides Governors the 
            authority to certify local WIBs every two years, however, this 
            certification must be granted as long as local WIBs meet 
            minimum federal requirements for performance and board 
            composition.  Proponents argue that federal performance 
            measures are largely inadequate for ensuring that local WIA 
            dollars provide quality service that lead workers to good 
            jobs.  In addition, proponents argue that the performance of 
            California's local WIBs has been inconsistent throughout the 
            state and lacks a unified goal.

            Proponent believe that this bill will raise the bar statewide 
            for performance and quality outcomes for California's 
            federally funded workforce investment system by outlining a 
            high performance standard that the local WIBs can strive for 
            in order to be eligible for additional funding. In addition, 
            proponents argue that it is essential that there be a direct 
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            correlation between the training workers receive and the jobs 
            available.  According to proponents, this bill will create an 
            incentive by which local WIBs can strive to meet a high 
            performance standard which meets federal performance criteria, 
            develops stronger local workforce initiatives, and establishes 
            a business service plan that together can create a unified 
            goal to provide quality services that connect workers to good 
            paying jobs.  

          4.  Opponent Arguments  :

            None received.

                                       SUPPORT
          
          California Labor Federation - Co-Sponsor
          California Manufacturers & Technology Association - Co-Sponsor 
          State Building and Constructions Trades Council - Co-Sponsor 

          
                                     OPPOSITION
          
          None received




















          Hearing Date:  April 13, 2011                            SB 698  
          Consultant: Alma Perez                                   Page 6

          Senate Committee on Labor and Industrial Relations