Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 1271


Introduced by Assembly Member Bonta

February 22, 2013


An actbegin delete relating to economic developmentend deletebegin insert to add Article 3 (commencing with Section 14030) to Chapter 3 of Division 7 of the Unemployment Insurance Code, relating to workforce developmentend insert.

LEGISLATIVE COUNSEL’S DIGEST

AB 1271, as amended, Bonta. begin deleteEconomic end deletebegin insertWorkforce end insertdevelopment.

begin insert

The California Workforce Investment Board (board) is the body responsible for assisting the Governor in the development, oversight, and continuous improvement of California’s workforce investment system. Existing law requires that local workforce investment boards be established in each local workforce investment area of the state to assist the local chief elected official in planning, oversight, and evaluation of local workforce investment.

end insert
begin insert

This bill would establish the Economically Impacted Area Loan Repayment Program, to be administered by the board and to provide for the repayment of business school loans of participants who satisfy its requirements. The bill would require that a person agree in writing prior to completing an accredited business school based in the United States to establish a qualifying small business and employ residents of an economically impacted area in order to be eligible to participate in the program. The bill would establish that the maximum allowable amount of loan repayment is $105,000. The bill would require the board to recover the funds awarded plus interest if a program participant does not complete his or her contractual service obligation. The bill would establish the Economically Impacted Area Loan Repayment Program Fund to consist of private moneys donated to the program for deposit into the fund and any interest that accrues on those moneys. The bill would require that the fund would be used, upon appropriation by the Legislature, for the purposes of the program and would limit the funds that may be used for administrative costs, as specified. The bill would provide that these provisions are to be implemented only to the extent that the fund contains sufficient moneys to effectuate the purposes of the article as determined by the board.

end insert
begin delete

Existing law establishes various programs, including, but not limited to, the Capital Access Loan Program, to promote economic development throughout the state.

end delete
begin delete

This bill would declare the intent of the Legislature to enact legislation that would help create jobs in California by (1) establishing incentives, such as student loan forgiveness, to encourage recent graduates of undergraduate and graduate institutions to create jobs in communities with long-term unemployment rates significantly higher than the state’s average and (2) providing access to low-interest loans to small businesses that can demonstrate that they will create jobs with the additional capital.

end delete

Vote: majority. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

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

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertArticle 3 (commencing with Section 14030) is
2added to Chapter 3 of Division 7 of the end insert
begin insertUnemployment Insurance
3Code
end insert
begin insert, to read:end insert

begin insert

4 

5Article begin insert3.end insert  Economically Impacted Area Loan Repayment
6Program
7

 

8

begin insert14030.end insert  

This article shall be known as the Economically
9Impacted Area Loan Repayment Program. It shall be administered
10by the board and shall provide for the repayment of business school
11loans of participants who satisfy its requirements.

12

begin insert14032.end insert  

For purposes of this article:

13(a) “Economically impacted area” means a local workforce
14investment area that, as established by the board, has a monthly
15nonseasonally adjusted unemployment rate that is at least two
P3    1percentage points higher than the state average for 12 consecutive
2months.

3(b) “Fund” means the Economically Impacted Area Loan
4Repayment Program Fund.

5(c) “Program” means the Economically Impacted Area Loan
6Repayment Program established pursuant to this article.

7(d) “Qualifying small business” means a business to be founded
8by the recipient of the program within an economically impacted
9area that will employ residents of the economically impacted area
10and meet other requirements as established by the board.

11(e) “Selection committee” shall be determined by the board.

12

begin insert14034.end insert  

(a) To be eligible to participate in the program, a
13person shall agree in writing prior to completing an accredited
14business school based in the United States to establish a qualifying
15small business and employ residents of an economically impacted
16area.

17(b) Leaves of absence during service obligation established
18pursuant to subdivision (a) shall be permitted for serious illness,
19pregnancy, or other natural causes. The selection committee shall
20develop a process for determining the maximum permissible length
21of an absence, the maximum permissible leaves of absences and
22the process for reinstatement.

23(c) The maximum allowable amount of loan repayment shall be
24one hundred five thousand dollars ($105,000). These moneys shall
25be distributed over the course of three years following the founding
26of the qualified small business. The distribution of funds shall
27increase over the course of operating the business and shall be
28structured to ensure that at least 45 percent of the total repayment
29award is distributed upon completion of the third year.

30(d) If a program participant does not complete the service
31obligation pursuant to the contractual agreement between the
32board and the participant, the board shall recover the funds
33awarded plus interest.

34(e) The selection committee shall develop guidelines to select
35loan repayment recipients only upon receipt of donations sufficient
36to cover the costs of developing the guidelines.

37(f) The board, in consultation with the selection committee, shall
38 develop a process for outreach to potentially eligible participants.

39

begin insert14036.end insert  

The Economically Impacted Area Loan Repayment
40Program Fund is hereby established. The fund shall consist of
P4    1private moneys donated to the program for deposit into the fund
2and any interest that accrues on those moneys.

3(b) Moneys in the fund shall be used to fund loan repayment
4pursuant to agreements made with recipients and as follows:

5(1) Repayment shall not exceed one hundred five thousand
6dollars ($105,000) per recipient.

7(2) Repayment shall not exceed the amount of the educational
8expenses incurred by the recipient.

9(c) Moneys in the fund, upon appropriation by the Legislature,
10shall be used for the purposes of this article.

11(d) Moneys in the fund shall be used to pay for the cost of
12administering the program and for any other purpose authorized
13by this article. The cost of administering the program shall not
14exceed 10 percent of the total appropriation for the program.

15

begin insert14038.end insert  

This article shall be implemented only to the extent that
16the fund contains sufficient moneys to effectuate the purposes of
17the article as determined by the board.

end insert
begin delete
18

SECTION 1.  

It is the intent of the Legislature to enact
19legislation that would help create jobs in California by (a)
20establishing incentives, such as student loan forgiveness, to
21encourage recent graduates of undergraduate and graduate
22institutions to create jobs in communities with long-term
23unemployment rates significantly higher than the state’s average
24and (b) providing access to low-interest loans to small businesses
25that can demonstrate that they will create jobs with the additional
26capital.

end delete


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