BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair SB 1402 (Lieu) - Economic and Workforce Development Program Amended: As Introduced Policy Vote: Education 8-0 Urgency: No Mandate: No Hearing Date: May 7, 2012 Consultant: Jacqueline Wong-Hernandez This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 1402 recasts and revises provisions of the Education Code governing the California Community Colleges (CCC) Economic and Workforce Development (EWD) Program, and extends the program's sunset date from January 1, 2013 to January 1, 2018. Fiscal Impact: Sunset extension: $22.9 million - $46.7 million, annually; bill language specifies that funding is subject to an appropriation in the Budget Act, as the program is currently. Background: The purpose of the EWD program is to advance California's economic growth and global competitiveness through education and services that contribute to continuous workforce improvement, technology deployment, and business development and are consistent with the current needs of the state's regional economies. Local colleges and business partners form consortia to identify regional workforce needs and priorities, provide assistance to small businesses in the region through local EWD Centers, and train workers. Codified in 1991, the EWD program formalized earlier efforts to coordinate statewide technical training and programs for small businesses and economic development. SB 1809 (Polanco) Chapter 1057/1996 further clarified the legislative intent of the EWD Program, defined regional planning, priority setting and coordination and added audit requirements and accountability standards. SB 1809 also made economic development and continuous workforce improvement a primary mission of the CCC. Proposed Law: This bill places the EWD in a new Education Code SB 1402 (Lieu) Page 1 section, separates it from the Career Technical Pathways Initiative, and revises numerous goals and accountability measures of the program. It also extends the program sunset until January 1, 2018. Related Legislation: A companion bill, SB 1070 (Steinberg), also scheduled to be heard by this Committee on May 7, 2012, extends the sunset date for the Career Technical Education Pathways Initiative component of the current EWD Program. Where SB 1402 moves the EWD program to a new code section, SB 1070 leaves the Career Technical Education Pathways Initiative in Section 88532; the effect of which will remove the CTE Pathways from the existing EWD act. Staff Comments: This bill extends the sunset on a program that received $22.9 million last year, and in 2009-10; the program received $46.7 million in 2007-08 and in 2008-09, prior to substantial budget reductions across the CCC system and the state as a whole. In the absence of a sunset extension, the EWD program would cease on January 1, 2013. Extending the sunset continues the program, which also continues cost pressure to fund the program. Cost pressure would be for the current level of funding, at a minimum. This bill recasts and revises numerous aspects of the EWD program goals and principles, defines terms that are commonly used but were not at the time that the program was codified, and attempts to make the program more nimble as market needs change. While these changes will shape the program's direction and, to some degree, its activities, they remain within a larger EWD purpose and are not likely to drive unique state costs. This bill's changes to grantee accountability strengthen the Chancellor's ability to deny funding to programs that are less effective, and could make the program more cost effective overall. SB 1402 (Lieu) Page 2