BILL NUMBER: AB 1271 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 21, 2013
INTRODUCED BY Assembly Member Bonta
FEBRUARY 22, 2013
An act relating to economic development to
add Article 3 (commencing with Section 14030) to Chapter 3 of
Division 7 of the Unemployment Insurance Code, relating to workforce
development .
LEGISLATIVE COUNSEL'S DIGEST
AB 1271, as amended, Bonta. Economic
Workforce development.
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.
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.
Existing law establishes various programs, including, but not
limited to, the Capital Access Loan Program, to promote economic
development throughout the state.
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.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Article 3 (commencing with Section
14030) is added to Chapter 3 of Division 7 of the
Unemployment Insurance Code , to read:
Article 3. Economically Impacted Area Loan Repayment Program
14030. This article shall be known as the Economically Impacted
Area Loan Repayment Program. It shall be administered by the board
and shall provide for the repayment of business school loans of
participants who satisfy its requirements.
14032. For purposes of this article:
(a) "Economically impacted area" means a local workforce
investment area that, as established by the board, has a monthly
nonseasonally adjusted unemployment rate that is at least two
percentage points higher than the state average for 12 consecutive
months.
(b) "Fund" means the Economically Impacted Area Loan Repayment
Program Fund.
(c) "Program" means the Economically Impacted Area Loan Repayment
Program established pursuant to this article.
(d) "Qualifying small business" means a business to be founded by
the recipient of the program within an economically impacted area
that will employ residents of the economically impacted area and meet
other requirements as established by the board.
(e) "Selection committee" shall be determined by the board.
14034. (a) To be eligible to participate in the program, a person
shall 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.
(b) Leaves of absence during service obligation established
pursuant to subdivision (a) shall be permitted for serious illness,
pregnancy, or other natural causes. The selection committee shall
develop a process for determining the maximum permissible length of
an absence, the maximum permissible leaves of absences and the
process for reinstatement.
(c) The maximum allowable amount of loan repayment shall be one
hundred five thousand dollars ($105,000). These moneys shall be
distributed over the course of three years following the founding of
the qualified small business. The distribution of funds shall
increase over the course of operating the business and shall be
structured to ensure that at least 45 percent of the total repayment
award is distributed upon completion of the third year.
(d) If a program participant does not complete the service
obligation pursuant to the contractual agreement between the board
and the participant, the board shall recover the funds awarded plus
interest.
(e) The selection committee shall develop guidelines to select
loan repayment recipients only upon receipt of donations sufficient
to cover the costs of developing the guidelines.
(f) The board, in consultation with the selection committee, shall
develop a process for outreach to potentially eligible participants.
14036. The Economically Impacted Area Loan Repayment Program Fund
is hereby established. The fund shall consist of private moneys
donated to the program for deposit into the fund and any interest
that accrues on those moneys.
(b) Moneys in the fund shall be used to fund loan repayment
pursuant to agreements made with recipients and as follows:
(1) Repayment shall not exceed one hundred five thousand dollars
($105,000) per recipient.
(2) Repayment shall not exceed the amount of the educational
expenses incurred by the recipient.
(c) Moneys in the fund, upon appropriation by the Legislature,
shall be used for the purposes of this article.
(d) Moneys in the fund shall be used to pay for the cost of
administering the program and for any other purpose authorized by
this article. The cost of administering the program shall not exceed
10 percent of the total appropriation for the program.
14038. This article shall be implemented only to the extent that
the fund contains sufficient moneys to effectuate the purposes of the
article as determined by the board.
SECTION 1. It is the intent of the Legislature
to enact legislation that would help create jobs in California by (a)
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 (b) providing
access to low-interest loans to small businesses that can demonstrate
that they will create jobs with the additional capital.