BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 1402| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ UNFINISHED BUSINESS Bill No: SB 1402 Author: Lieu (D) Amended: 8/20/12 Vote: 21 SENATE EDUCATION COMMITTEE : 8-0, 4/18/12 AYES: Lowenthal, Alquist, Hancock, Huff, Liu, Price, Simitian, Vargas NO VOTE RECORDED: Runner, Blakeslee, Vacancy SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/24/12 AYES: Kehoe, Walters, Alquist, Dutton, Lieu, Price, Steinberg SENATE FLOOR : 38-0, 5/31/12 AYES: Alquist, Anderson, Berryhill, Blakeslee, Calderon, Cannella, Corbett, Correa, De León, DeSaulnier, Dutton, Emmerson, Evans, Fuller, Gaines, Hancock, Harman, Hernandez, Huff, Kehoe, La Malfa, Leno, Lieu, Liu, Lowenthal, Negrete McLeod, Padilla, Pavley, Price, Rubio, Simitian, Steinberg, Vargas, Walters, Wolk, Wright, Wyland, Yee NO VOTE RECORDED: Runner, Strickland ASSEMBLY FLOOR : 78-0, 8/23/12 - See last page for vote SUBJECT : Community colleges: Economic and Workforce Development Program SOURCE : California Community College Association for Occupational CONTINUED SB 1402 Page 2 Education California Community Colleges of the Chancellors Office DIGEST : This bill recasts and revises provisions of the Education Code governing the California Community Colleges (CCC) Economic and Workforce Development Program and extends the program's sunset date from January 1, 2013, to January 1, 2018. Assembly Amendments add intent language which specifies that the Legislature in reauthorizing the CCC Economic Workforce Development Program that the program work in coordination with California's other workforce and economic development programs and activities, as specified. ANALYSIS : Existing law establishes the CCC Economic and Workforce Development (EWD) Program as a primary mission of the CCC. Existing law specifies the mission and goals of the program, establishes an administrative structure for the program that includes (1) the CCC Business Resource Assistance and Innovation Network Trust Fund, (2) Centers and Regional Collaboratives, and (3) the Job Development Incentive Training Program. This program is administered through the CCC Chancellor's Office. Existing law requires the Chancellor to implement accountability measures for the program and annually report specified information to the Governor and the Legislature. Existing law requires the CCC Board of Governors to assist economic and workforce regional development centers and consortia to improve linkages and career technical education (CTE) pathways between high schools and community colleges in a manner that improves the quality of career exploration. Existing federal law, the Workforce Investment Act, provides funding for workforce investment activities, including training, access to career information, counseling, and other support services. This bill recasts and revises the provisions governing the CONTINUED SB 1402 Page 3 CCCs Economic and Workforce Development (EWD) Program. Specifically, this bill: 1. Establishes the program under a new Part of the Education Code, moving the EWD program from Section 88500 et seq. to Section 88600 et seq. 2. Extends the sunset on the EWD program from January 1, 2013, to January 1, 2018. 3. Adds six principles to the mission of the EWD Program. Specifically, the bill requires the EWD program to: A. Be responsive to the needs of employers, workers, and students. B. Collaborate with other public institutions, aligning resources to foster cooperation across workforce education and service delivery systems, and building well-articulated career pathways. C. Make data driven and evidence based decisions, investing resources and adopting practices on the basis of what works. D. Develop strong partnerships with the private sector, ensuring industry involvement in needs assessment, planning, and program evaluation. E. Be outcome oriented and accountable, measuring results for program participants, including students, employers, and workers. F. Be accessible to employers, workers, and students who may benefit from its operation. 4. Updates the mission of the EWD program to reflect the need to implement sector strategies that align with labor markets. 5. Updates the General Provisions to strengthen decision criteria for allocating funds to ensure that education and services are responsive to changing local markets and to improve accountability of regional programs. CONTINUED SB 1402 Page 4 Requires funding to be based on each of the following: A. An evaluation of the relevance of the grant to the labor market needs of the state and relevant region's competitive and emerging industry sectors and industry cluster, or to the state's need to plug skills gaps and skills shortages in the economy, including skills gaps and shortages at the state and regional level. B. An assessment of the past performance of the grant recipient. C. For grants providing direct services to employers and industry, an assessment of the purported beneficial impacts of the grant on the relevant businesses, which may include a review of the grant's purported impacts as specified. D. For grants involving direct education and training services provided to workers and students, an assessment of the educational and training goals of the grant, the projected numbers of the students and workers served and projected rates of course and program completion or transfer-readiness, the projected rate of skills attainment for certificates and degrees, and the projected wages and rate of employment placement for those entering the labor market. E. For technical assistance and logistical support projects, a concrete enumeration of the ways the project will collaborate with the Chancellor's Office to advance sector strategies, regional development, accountability based on performance data, and the adoption of effective workforce and economic development practices. F. Authorizes the Chancellor's Office to terminate programs for nonperformance. 6. Updates definitions to reflect current practices: CONTINUED SB 1402 Page 5 A. Defines career pathways and career ladders or career lattices to mean an identified series of positions, work experiences, or educational benchmarks or credentials that offer occupational and financial advancement within a specific career field or related field over time. B. Defines high-priority occupation to mean an occupation that has a significant presence in a targeted industry or sector or industry cluster, as specified. C. Defines industry cluster as a group of employers closely linked by a common product or services, workforce needs, similar technologies, and supply chains in a given regional economy or labor market. D. Defines industry sector to mean those firms that produce similar products or provide similar services using a somewhat similar business process. E. Defines sector strategies to mean prioritizing investments in competitive and emerging industry sectors and industry clusters as specified. F. Defines stackable credentials to mean a sequence of modularized training or credentials where each stack has employment or industry value. G. Adds intent language which specifies that the Legislature in reauthorizing the CCC Economic Workforce Development Program that the program work in coordination with California's other workforce and economic development programs and activities, as specified. Comments The EWD Program . 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. CONTINUED SB 1402 Page 6 Local colleges and business partners form consortia to identify regional workforce needs and priorities, provide assistance to small businesses in the region through local Economic and Workforce Development Centers and train workers. The partnerships enable colleges to develop curricula that address the training needs of local industry. Codified in 1991, the EWD program formalized earlier efforts to coordinate statewide technical training and programs for small businesses and economic development. In 1996, SB 1809 (Polanco, Chapter 1057) further clarified the legislative intent of the Program, defined regional planning, priority setting and coordination and added accountability and audit requirements. The 1996 legislation also made economic development and continuous workforce improvement a primary mission of the CCC. The 2010-11 EWD Annual Report shows that community colleges play an integral role in helping California build its workforce despite budget cuts and stagnant economic growth. The report noted that during the reporting period, 929 people received a job through an EWD program, while an additional 9,475 people were able to retain their job through EWD services. A one-time return-on-investment report conducted by Time Structures, Inc. found that from 2002-2009, the EWD Program assisted an average of 41,000 businesses, 107,000 students and trainees, and placed 4,300 individuals in jobs. The report revealed that it cost the state of California an average of $589 to train each worker in a highly concentrated one-time course. Each newly trained worker earned a higher wage, subsequently paying an additional $450 in state and local taxes over the next three years. The report indicated that the workers' higher tax payments returned almost 80% of the state's costs for the training. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee: Sunset extension : $22.9 million - $46.7 million, annually; bill language specifies that funding is subject CONTINUED SB 1402 Page 7 to an appropriation in the Budget Act, as the program is currently. SUPPORT : (Verified 5/23/12) California Community College Association for Occupational Education (co-source) California Community Colleges Chancellor's Office (co-source) Aerospace Dynamics International, Inc. Barstow Community College Bayless Engineering & Manufacturing Biotechnology Initiative of the California Community Colleges Boston Scientific Business & Entrepreneurship Center at Cuesta College Butte-Glenn Community College District California Asian Pacific Chamber of Commerce California Association for Local Economic Development California Chamber of Commerce California Hospital Association California Manufacturers & Technology Association California State Association of Electrical Workers California Workforce Association Cerritos Community College District Coast Community College District College of the Canyons Community College League of California Desert Community College District El Camino Community College District Envision Education Faculty Association of California Community Colleges Long Beach City College Los Angeles/Orange County Biotechnology Center Los Rios Community College District Mendocino College Nursing Program Mt. San Antonio College Center for Excellence National Electrical Contractors Association - California Chapters Palomar Health Powder Coating Plus Prosperity Research Institute Saddleback College San Bernardino Community College District CONTINUED SB 1402 Page 8 Santa Clarita Valley Aerospace Defense Coalition Santa Clarita Valley Economic Development Corporation Shasta-Tehama-Trinity Joint Community College District Sierra College Silicon Valley Leadership Group South Orange County Community College District Southern California Biotechnology Center at San Diego Miramar College Southern California Regional Transit Training Consortium Valley Industry Association of Santa Clarita Ventura County Community College District Wright Engineering, Inc. Yosemite Community College District ARGUMENTS IN SUPPORT : Supporters argue that the EWD program has provided services and training to meet the needs of regional economies for more than 20 years and is scheduled to sunset on January 1, 2013. This bill extends the sunset date of the program to January 1, 2018, and recasts and revises the provisions governing the program to ensure the program continues to advance the state's economy. According to the author's office, the revised program would improve the functions of the EWD program in three primary ways: (1) making the program more nimble and better able to respond to changing economic conditions, (2) making the program more accountable for investments and performance by strengthening the evaluation framework for EWD grants and programs, and (3) encouraging better integration and communication of EWD programs with CTE programs. ASSEMBLY FLOOR : 78-0, 8/23/12 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva, Skinner, CONTINUED SB 1402 Page 9 Smyth, Solorio, Swanson, Torres, Valadao, Wagner, Wieckowski, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Donnelly, Roger Hernández PQ:m 8/24/12 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED