BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair AB 2060 (V.M. Perez) - Supervised Population Workforce Training Grant Program. Amended: May 23, 2014 Policy Vote: Public Safety 7-0 Urgency: No Mandate: No Hearing Date: August 14, 2014 Consultant: Jolie Onodera SUSPENSE FILE. AS AMENDED. Bill Summary: AB 2060 would establish the "Supervised Population Workforce Training Grant Program," to be administered by the California Workforce Investment Board (CWIB). This bill would require the grant program to be funded, upon appropriation by the Legislature, from the Recidivism Reduction Fund (RRF), as specified. Fiscal Impact (as approved on August 14, 2014): Major future cost pressure, likely in the millions to tens of millions of dollars (Special Fund/General Fund) to support a statewide grant program. Implementation of the program is contingent upon the CWIB notifying the Department of Finance (DOF) that sufficient moneys have been appropriated for this specific grant program. Annual costs of about $100,000 (General Fund*) to the CWIB to provide programmatic oversight, administer the grant program through the development of the criteria for selection of grantees, design the grant application process, process and review applications, collection of data from grantees, and submittal of a report to the Legislature. Costs are to be funded from the $1 million RRF appropriated in the 2014 Budget Act for this purpose. Ongoing administrative costs potentially in the range of five to 10 percent of moneys annually appropriated, to the Employment Development Department (EDD) for CWIB to utilize the EDD as its fiscal and administrative agent for tasks such as the obligation of funds, performance of grant closeout activities and grantee compliance audits. *Recidivism Reduction Fund AB 2060 (V.M. Perez) Page 1 Background: SB 105 (Steinberg) Chapter 310/2013 created the Recidivism Reduction Fund (RRF) in the State Treasury to be available for appropriation by the Legislature for activities aimed at reducing the state's prison population, including, but not limited to, reducing recidivism. (Penal Code § 1233.9.) SB 105 provided $315 million from the General Fund for the Department of Corrections and Rehabilitation (CDCR) to house inmates in contracted facilities to avoid early release and comply with the court-ordered population cap. Due to the two-year extension granted by the courts to comply with the population cap, $91 million of the $315 million was available for transfer to the RRF. The 2014 Budget Act (SB 852 (Leno)) appropriates the full $91 million transferred to the RRF, with $42 million provided to the CDCR, $28 million to the Board of State and Community Corrections (BSCC), and $20 million to court programs and social innovation bonds. The remaining $1 million has been appropriated as one-time funding for support of the Employment Development Department (EDD) for a recidivism reduction workforce training and development grant program. Existing law states that the California Workforce Investment Board is the body responsible for assisting the Governor in the development, oversight, and continuous improvement of California's workforce investment system and the alignment of the education and workforce investment systems to the needs of the 21st century economy and workforce. (Unemployment Insurance Code § 14010) This bill seeks to assist former offenders to successfully reenter their communities and would create a program to be administered by the CWIB to provide grant funding for vocational training and apprenticeship opportunities for offenders under county supervision who are on probation, mandatory community supervision, or post-release community supervision (PRCS). Proposed Law: This bill would establish the "Supervised Population Workforce Training Grant Program," to be administered by the CWIB, as follows: Requires CWIB to consult with public and private stakeholders, including local WIBs, local governments, and nonprofit community-based organizations that serve the supervised population (persons who are on probation, mandatory supervision, or PRCS), in developing the program. AB 2060 (V.M. Perez) Page 2 Specifies the grant program to be funded, upon appropriation by the Legislature, using an unspecified amount of moneys from the RRF. Specifies implementation of the program is contingent upon the Director of the State WIB notifying the Department of Finance that sufficient moneys have been appropriated for this specific grant program. Requires the grant funding to be competitively awarded through at least two rounds of funding, with the first phase of funding being awarded on or before May 1, 2015. Requires CWIB to administer the grant program by developing criteria for the selection of grantees through a public application process including the rating and ranking of applications meeting specified criteria, as well as designing an application process to ensure specified criteria are addressed. Provides that each county is eligible to apply, and a single application may include multiple counties applying jointly. Specifies eligible uses of grant funds to include but are not limited to vocational training, stipends for trainees, and apprenticeship opportunities for the supervised population. Provides that preference shall be awarded to applications that propose matching funds, that currently administers or participates in a workforce training program for the supervised population, or that proposes participation by nonprofit community-based organizations that serve the supervised population. Provides that applications must meet numerous requirements, as specified. Requires grant recipients to report to CWIB at least annually regarding the use of funds and workforce training program outcomes. Requires CWIB to submit a report to the Legislature by January 1, 2018, utilizing reports from grantees, to contain specified information. Sunsets the bill's provisions on January 1, 2021, unless a later enacted statute deletes or extends that date. Related Legislation: SB 852 (Leno) Chapter 25/2014, the Budget Act of 2014, appropriated $1 million from the RRF, "for support of the Employment Development Department for a recidivism reduction workforce training and development grant program." AB 2060 (V.M. Perez) Page 3 Staff Comments: The CWIB has indicated that in order to provide the high level programmatic oversight of the program to the EDD, aggregate grant recipient data, and develop the legislative report, the CWIB would require one position with an approximate annual cost of $100,000 depending on the number of grants awarded, which would be dependent on the amount of RRF funds appropriated by the Legislature. In addition to CWIB's cost, the CWIB must utilize the EDD as its fiscal and administrative agent. As EDD has historically required between five and 10 percent to perform fiscal and administrative tasks such as obligating funds, processing competitive solicitation and grant documents, disbursing funds to grantees, performing grant closeout activities, and performing grantee compliance audits. To support a statewide grant program would cost potentially in the millions to tens of millions of dollars, creating major future cost pressure. Implementation of the program is contingent upon the CWIB notifying the DOF that sufficient moneys have been appropriated for this specific grant program. Given the 2014 Budget Act fully allocates the $91 million available in the RRF, and provides only $1 million RRF one-time to the EDD to support such a program, additional moneys would need to be transferred to the RRF in order to support an adequate appropriation for this grant program. Committee amendments specify that administration of the program by CWIB is to be funded through moneys appropriated in the Budget Act, and authorize future appropriations for the grant program to come from any fund.