Senate Bill No. 118

Introduced by Senator Lieu

January 17, 2013

An act to amend Sections 14000, 14005, 14010, 14013, and 14020 of the Unemployment Insurance Code, relating to unemployment insurance.

LEGISLATIVE COUNSEL’S DIGEST

SB 118, as introduced, Lieu. Unemployment insurance: education and workforce investment systems.

Existing law provides that the California Workforce Investment Board is responsible for assisting the Governor in the development, oversight, and continuous improvement of California’s workforce investment system. Existing law further provides that the board must assist the Governor in targeting resources to specified high-wage industry sectors and providing guidance to ensure that services reflect the needs of those sectors.

This bill would provide that the board is also responsible for assisting the Governor in the alignment of the education and workforce investment systems to the needs of the 21st century workforce and the promotion and development of a well-educated and highly skilled 21st century economy and workforce. This bill would require the board to assist the Governor in targeting resources to specified industry clusters that provide economic security and leverage state and federal funds to ensure that resources are invested in activities that meet the needs of specified industry sectors and advance the education and employment of students and workers so they can meet the specified needs of the state, its regional economies, and leading industry sectors.

Existing law requires the board, in collaboration with specified state and local partners, and the local workforce investment boards to develop a specified strategic workforce plan, updated at least every 5 years, to address the state’s economic, demographic, and workplace needs and to meet the single state plan requirement of the Workforce Investment Act of 1998.

This bill would require, as part of the strategic workforce plan, the creation of a California Industry Sector Initiative that will accomplish specified tasks, including aligning and leveraging federal, state, and local Workforce Investment Act funding streams, identifying specified industry sectors and clusters, providing skills-gap analysis, and establishing specified eligibility criteria for the Workforce Investment Act eligible training provider list.

This bill would also make related changes.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

Section 14000 of the Unemployment Insurance
Code is amended to read:

14000.  

(a) The Legislature finds and declares that, in order
for California to remain prosperous and globally competitive, it
needs to have a begin insert well-educated and end insert highly skilled workforce.

(b) The Legislature begin delete recognizes all of the following: end delete begin insert finds and end insert
begin insert declares that the following principles shall guide the state’s end insert
begin insert workforce investment system: end insert

begin delete

(1) California must transform its current job training, job
placement, and vocational education programs into an integrated,
accessible, and accountable workforce investment system that can
effectively serve job seekers, students, and employers.

end delete begin insert

(1) Workforce investment programs and services shall be
responsive to the needs of employers, workers, and students by
accomplishing the following:

end insert begin delete

(2) California’s workforce investment system must provide
lifelong learning for all Californians, promote self-sufficiency,
link education and training to economic development, and prepare
California

end delete

begin insert (A) end insert begin insert   end insert begin insert Preparing California’s students and workers with the skills end insert
begin insert necessary end insert to successfully compete in the global economy.

begin insert

(B) Producing greater numbers of individuals who obtain
industry-recognized certificates and degrees in competitive and
emerging industry sectors and filling critical labor market skills
gaps.

end insert begin insert

(C) Adapting to rapidly changing local and regional labor
markets as specific workforce skill requirements change over time.

end insert begin insert

(D) Preparing workers for good-paying jobs that foster
economic security and upward mobility.

end insert begin insert

(2) State and local workforce investment boards are encouraged
to collaborate with other public and private institutions, including
businesses, unions, nonprofit organizations, kindergarten and
grades 1 to 12, inclusive, career technical education programs,
adult career technical education and basic skills programs,
community college career technical education and basic skills
programs, the California Community Colleges Economic and
Workforce Development Program, and the Employment Training
Panel, to better align resources across workforce education and
training service delivery systems and build a well-articulated
workforce investment system by accomplishing the following:

end insert begin insert

(A) Adopting local and regional training and education
strategies that build on the strengths and fill the gaps in the
education and workforce development pipeline in order to address
the needs of job seekers, workers, and employers within regional
labor markets by supporting sector strategies.

end insert begin insert

(B) Leveraging resources across education and workforce
training delivery systems to build career pathways and fill critical
skills gaps.

end insert begin insert

(3) Workforce investment programs and services shall be data
driven and evidence based when setting priorities, investing
resources, and adopting practices.

end insert begin insert

(4) Workforce investment programs and services shall develop
strong partnerships with the private sector, ensuring industry
involvement in needs assessment, planning, and program
evaluation.

end insert begin insert

(A) Workforce investment programs and services shall
encourage industry involvement by developing strong partnerships
with an industry’s employers and the unions that represent the
industry’s workers.

end insert begin insert

(B) Workforce investment programs and services may consider
the needs of employers of all sizes, including large, medium, small,
and microenterprise employers, when setting priorities, investing
resources, and adopting practices.

end insert begin insert

(5) Workforce investment programs and services shall be
outcome oriented and accountable, measuring results for program
participants, including, but not limited to, outcomes related to
program completion, employment, and earnings.

end insert begin delete

(3) The programs described in paragraphs (1) and (2) must

end delete

begin insert (6) end insert begin insert   end insert begin insert Programs and services shall end insert be accessible to begin delete all Californians, end delete
begin delete including end delete begin insert employers, workers, and students who may benefit from end insert
begin insert their operation, including individuals with employment barriers, end insert
begin insert such as end insert persons with economic, physical, or other barriers to
employment.

SEC. 2.  

Section 14005 of the Unemployment Insurance Code
is amended to read:

14005.  

For purposes of this division:

(a) “Board” shall mean the California Workforce Investment
Board.

(b) “Agency” means the Labor and Workforce Development
Agency.

begin delete

(c) “Workforce Investment Act of 1998” means the federal act
enacted as Public Law 105-220.

end delete begin insert

(c) “Career pathways,” “career ladders,” or “career lattices”
mean an identified series of positions, work experiences, or
educational benchmarks or credentials with multiple access points
that offer occupational and financial advancement within a
specified career field or related fields over time.

end insert begin insert

(d) “Cluster-based sector strategies” means methods of focusing
workforce and economic development on those sectors that have
demonstrated a capacity for economic growth and job creation in
a particular geographic area.

end insert begin insert

(e) “Data driven” means a process of making decisions about
investments and policies based on systematic analysis of data,
which may include data pertaining to labor markets.

end insert begin insert

(f) “Economic security” means, with respect to a worker,
earning a wage sufficient to support a family adequately, and, over
time, to save for emergency expenses and adequate retirement
income, based on factors such as household size, the cost of living
in the worker’s community, and other factors that may vary by
region.

end insert begin insert

(g) “Evidence-based” means making use of policy research as
a basis for determining best policy practices. Evidence-based
policymakers adopt policies that research has shown to produce
positive outcomes, in a variety of settings, for a variety of
populations over time. Successful, evidence-based programs deliver
quantifiable and sustainable results. Evidence-based practices
differ from approaches that are based on tradition, belief,
convention, or anecdotal evidence.

end insert begin insert

(h) “High-priority occupations” mean occupations that have
a significant presence in a targeted industry sector or industry
cluster, are in demand by employers, and pay or lead to payment
of a wage that provides economic security.

end insert begin insert

(i) “Individual with employment barriers” means an individual
with any characteristic that substantially limits an individual’s
ability to obtain employment, including indicators of poor work
history, lack of work experience, or access to employment in
nontraditional occupations, long-term unemployment, lack of
educational or occupational skills attainment, dislocation from
high-wage and high-benefit employment, low levels of literacy or
English proficiency, disability status, or welfare dependency.

end insert begin insert

(j) “Industry cluster” means a geographic concentration or
emerging concentration of interdependent industries with direct
service, supplier, and research relationships, or independent
industries that share common resources in a given regional
economy or labor market. An industry cluster is a group of
employers closely linked by common product or services, workforce
needs, similar technologies, and supply chains in a given regional
economy or labor market.

end insert begin insert

(k) (1) “Industry or sector partnership” means a workforce
collaborative that organizes key stakeholders in a targeted industry
cluster into a working group that focuses on the workforce needs
of the targeted industry cluster. An industry or sector partnership
organizes the stakeholders connected with a specific local or
regional industry--multiple firms, labor groups, education and
training providers, and workforce and education systems--to
develop workforce development strategies within the industry.
Successful sector partnerships leverage partner resources to
address both short-term and long-term human capital needs of a
particular sector, including by analyzing current labor markets
and identifying barriers to employment within the industry,
developing cross-firm skill standards, curricula, and training
programs, and developing occupational career ladders to ensure
workers of all skill levels can advance within the industry.

end insert begin insert

(2) Industry or sector partnerships include, at the appropriate
stage of development of the partnership, all of the following:

end insert begin insert

(A) Representatives of multiple firms or employers in the
targeted industry cluster, including small-sized and medium-sized
employers when practicable.

end insert begin insert

(B) One or more representatives of state labor organizations,
central labor coalitions, or other labor organizations, except in
instances where no labor representations exists.

end insert begin insert

(C) One or more representatives of local workforce investment
boards.

end insert begin insert

(D) One or more representatives of kindergarten and grades 1
to 12, inclusive, and postsecondary educational institutions or
other training providers, including, but not limited to, career
technical educators.

end insert begin insert

(E) One or more representatives of state workforce agencies or
other entities providing employment services.

end insert begin insert

(3) An industry or sector partnership may also include
representatives from the following:

end insert begin insert

(A) State or local government.

end insert begin insert

(B) State or local economic development agencies.

end insert begin insert

(C) Other state or local agencies.

end insert begin insert

(D) Chambers of commerce.

end insert begin insert

(E) Nonprofit organizations.

end insert begin insert

(F) Philanthropic organizations.

end insert begin insert

(G) Economic development organizations.

end insert begin insert

(H) Industry associations.

end insert begin insert

(I) Other organizations, as determined necessary by the
members comprising the industry or sector partnership.

end insert begin insert

(l) “Industry sector” means those firms that produce similar
products or provide similar services using somewhat similar
business processes, and are closely linked by workforce needs,
within a regional labor market.

end insert begin delete

(d)

end delete

begin insert (m) end insert  “Local labor federation” means a central labor council that
is an organization of local unions affiliated with the California
Labor Federation or a local building and construction trades council
affiliated with the State Building and Construction Trades Council.

begin insert

(n) “Sector strategies” means methods of prioritizing
investments in competitive and emerging industry sectors and
industry clusters on the basis of labor market and other economic
data indicating strategic growth potential, especially with regard
to jobs and income, and exhibit the following characteristics:

end insert begin insert

(1) Focus workforce investment in education and workforce
training programs that are likely to lead to jobs providing
economic security or to an entry-level job with a well-articulated
career pathway into a job providing economic security.

end insert begin insert

(2) Effectively boost labor productivity or reduce business
barriers to growth and expansion stemming from workforce supply
problems, including skills gaps and occupational shortages by
directing resources and making investments to plug skills gaps
and provide education and training programs for high-priority
occupations.

end insert begin insert

(3) May be implemented using articulated career pathways or
lattices and a system of stackable credentials.

end insert begin insert

(4) May target underserved communities, disconnected youths,
incumbent workers, and recently separated military veterans.

end insert begin insert

(5) Frequently are implemented using industry or sector
partnerships.

end insert begin insert

(6) Typically are implemented at the regional level where sector
firms, those employers described in subdivisions (j) and (l), often
share a common labor market and supply chains. However, sector
strategies may also be implemented at the state or local level
depending on sector needs and labor market conditions.

end insert begin insert

(o) “Workforce Investment Act of 1998” means the federal act
enacted as Public Law 105-220.

end insert

SEC. 3.  

Section 14010 of the Unemployment Insurance Code
is amended to read:

14010.  

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 begin delete system end delete begin insert system and the alignment of the education and end insert
begin insert workforce investment systems to the needs of the 21st century end insert
begin insert economy and workforce end insert .

SEC. 4.  

Section 14013 of the Unemployment Insurance Code
is amended to read:

14013.  

The board shall assist the Governor in the following:

(a) Promoting the development of a well-educated and highly
skilled begin insert 21st century end insert workforce.

(b) Developing the State Workforce Investment Plan.

(c) Developing guidelines for the continuous improvement and
operation of the workforce investment system, including:

(1) Developing policies to guide the one-stop system.

(2) Providing technical assistance for the continuous
improvement of the one-stop system.

(3) Recommending state investments in the one-stop system.

(4) Targeting resources to begin delete high-wage end delete begin insert competitive and emerging end insert
industry sectors begin delete that end delete begin insert and industry clusters that provide economic end insert
begin insert security and end insert are either high-growth sectors or critical to
California’s economy, or both. begin insert These industry sectors and clusters end insert
begin insert shall have significant economic impacts on the state and its end insert
begin insert regional and workforce development neds, and have documented end insert
begin insert career opportunities. end insert

begin insert

(5) To the extent permissible under state and federal laws,
recommending youth policies and strategies that support linkages
between kindergarten and grades 1 to 12, inclusive, and community
college educational systems and youth training opportunities in
order to help youth secure educational and career advancement.
These policies and strategies may be implemented using a sector
strategies framework and should ultimately lead to placement in
a job providing economic security or job placement in an
entry-level job that has a well-articulated career pathway or career
ladder to a job providing economic security.

end insert begin insert

(6) To the extent permissible under state and federal law,
recommending adult and dislocated worker training policies and
investments that offer a variety of career opportunities while
upgrading the skills of California’s workforce. These may include
training policies and investments pertaining to any of the following:

end insert begin insert

(A) Occupational skills training, including training for
nontraditional employment.

end insert begin insert

(B) On-the-job training.

end insert begin insert

(C) Programs that combine workplace training with related
instruction, which may include cooperative education programs.

end insert begin insert

(D) Training programs operated by the private sector.

end insert begin insert

(E) Skill upgrading and retraining.

end insert begin insert

(F) Entrepreneurial training.

end insert begin insert

(G) Job readiness training.

end insert begin insert

(H) Adult education and literacy activities provided in
combination with any of the services described in this paragraph.

end insert begin insert

(I) Customized training conducted with a commitment by an
employer or group of employers to employ an individual upon
successful completion of the training.

end insert

(d) Developing and continuously improving the statewide
workforce investment system as delivered via the one-stop delivery
begin delete system, end delete begin insert system and via other programs and services supported by end insert
begin insert funding from the federal Workforce Investment Act of 1998, end insert
including:

(1) Developing linkages in order to begin delete assure end delete begin insert ensure end insert coordination
and nonduplication among workforce programs and activities.

(2) Reviewing local workforce investment plans.

(3)  begin delete Providing guidance to ensure services reflect the needs of end delete
begin delete high-wage end delete begin insert Leveraging state and federal funds to ensure that end insert
begin insert resources are invested in activities that meet the needs of the state’s end insert
begin insert competitive and emerging end insert begin insert industry sectors and advance the end insert
begin insert education and employment needs of students and workers so they end insert
begin insert can keep pace with the education and skill needs of the state, its end insert
begin insert regional economies, and leading end insert industry sectors.

(e) Commenting, at least once annually, on the measures taken
pursuant to the Carl D. Perkins Vocational and Applied Technology
Education Act Amendments of 1990 begin delete ( Public end delete begin insert (Public end insert Law 101-392;
20 U.S.C. Sec. 2301 et seq.).

(f) Designating local workforce investment areas within the
state based on information derived from all of the following:

(1) Consultations with the Governor.

(2) Consultations with the chief local elected officials.

(3) Consideration of comments received through the public
comment process, as described in Section 112(b)(9) of the federal
Workforce Investment Act of 1998.

(g) Developing and modifying allocation formulas, as necessary,
for the distribution of funds for adult employment and training
activities, for youth activities to local workforce investment areas,
and dislocated worker employment and training activities, as
permitted by federal law.

(h) Coordinating the development and continuous improvement
of comprehensive state performance measures, including state
adjusted levels of performance, to assess the effectiveness of the
workforce investment activities in the state.

(i) Preparing the annual report to the United States Secretary of
Labor.

(j) Recommending policy for the development of the statewide
employment statistics system, including workforce and economic
data, as described in Section 15 of Title 29 of the United States
Code, and using, to the fullest extent possible, the Employment
Development Department’s existing labor market information
systems.

(k) Recommending strategies to the Governor for strategic
training investments of the Governor’s 15-percent discretionary
funds.

(l) Developing and recommending waivers, in conjunction with
local workforce investment boards, to the Governor as provided
for in the federal Workforce Investment Act of 1998.

(m) Recommending policy to the Governor for the use of the
25-percent rapid response funds, as authorized under the federal
Workforce Investment Act of 1998.

(n) Developing an application to the United States Department
of Labor for an incentive grant under Section 9273 of Title 20 of
the United States Code.

SEC. 5.  

Section 14020 of the Unemployment Insurance Code
is amended to read:

14020.  

begin insert (a) end insert begin insert   end insert The California Workforce Investment Board, in
collaboration with state and local partners, including the Chancellor
of the California Community Colleges, the State Department of
Education, other appropriate state agencies, and local workforce
investment boards, shall develop a strategic workforce plan to
serve as a framework for the development of public policy, fiscal
investment, and operation of all state labor exchange, workforce
education, and training programs to address the state’s economic,
demographic, and workforce needs. The strategic workforce plan
shall also serve as the framework for the single state plan required
by the begin insert federal end insert Workforce Investment Act of 1998. The plan shall
be updated at least every five years.

begin insert

(b) The state shall develop a California Industry Sector Initiative
that will serve as the cornerstone of the state plan and provide a
framework for state workforce investments and support for sector
strategies.

end insert begin insert

(c) The California Workforce Investment Board shall work
collaboratively with state and local partners to identify ways to
eliminate systemwide barriers and better align and leverage
federal, state, and local Workforce Investment Act funding streams
and policies to develop, support, and sustain regional alliances
of employers and workforce and education professionals who are
working to improve the educational pipeline, establish
well-articulated career pathways, provide industry-recognized
credentials and certificates, and address the career advancement
needs of current and future workers in competitive and emergent
industry sectors and clusters. The California Workforce Investment
Board and its partners shall work collaboratively to maximize
state and local investments and pursue other resources to address
the skills-gap needs identified pursuant to paragraph (3) of
subdivision (d).

end insert begin insert

(d) In order to support the requirement of the plans in
subdivision (a), the California Workforce Investment Board shall
do the following:

end insert begin insert

(1) Annually identify industry sectors and industry clusters that
have a competitive economic advantage and demonstrated
economic importance to the state and its regional economies. In
developing this analysis, the California Workforce Investment
Board shall consider the expertise of local workforce investment
boards in the state’s respective regional economies and shall
encourage the local workforce investment boards to identify
industry sectors and industry clusters that have a competitive
economic advantage and demonstrated economic importance in
their respective local workforce investment areas.

end insert begin insert

(2) Annually identify new dynamic emergent industry sectors
and industry clusters with substantial potential to generate new
jobs and income growth for the state and its regional economies.
In developing this analysis, the California Workforce Investment
Board shall consider the expertise of local workforce investment
boards in the state’s respective regional economies and shall
encourage the local workforce investment boards to identify new
dynamic emergent industry sectors and industry clusters with
substantial potential to generate new jobs and income growth in
their respective local workforce investment areas.

end insert begin insert

(3) Provide an annual skills-gap analysis enumerating
occupational and skills shortages in the industry sectors and
industry clusters identified as having strategic importance to the
state’s economy and its regional economies. In developing this
analysis, the California Workforce Investment Board shall consider
the expertise of local workforce investment boards in the state’s
respective regional economies and shall encourage the local
workforce investment boards to conduct skills-gap analysis for
their respective local workforce investment areas. Skills-gap
analysis for the state and its regional economies shall use labor
market data to specify a list of high-priority, in-demand
occupations for the state and its regional economies. This list shall
be used to inform investment decisions and eligible training
provider policies.

end insert begin insert

(4) Establish, with input from local workforce investment boards
and other stakeholders, initial and subsequent eligibility criteria
for the federal Workforce Investment Act of 1998 eligible training
provider list that effectively directs training resources into training
programs leading to employment in high-demand, high-priority,
and occupations that provide economic security, particularly those
facing a shortage of skilled workers. The subsequent eligibility
criteria, to the extent feasible, shall use performance and outcome
measures to determine whether a provider is qualified to remain
on the list. At a minimum, initial and subsequent eligibility criteria
shall consider the following:

end insert begin insert

(A) The relevance of the training program to the workforce
needs of the state’s strategic industry sectors and industry clusters.

end insert begin insert

(B) The need to plug skills gaps and skills shortages in the
economy, including skills gaps and skills shortages at the state
and regional level.

end insert begin insert

(C) The need to plug skills gaps and skills shortages in local
workforce investment areas.

end insert begin insert

(D) The likelihood that the training program will lead to job
placement in a job providing economic security or job placement
in an entry-level job that has a well-articulated career pathway
or career ladder to a job providing economic security.

end insert begin insert

(E) The need for basic skills and bridge training programs that
provide access to occupational skills training for individuals with
barriers to employment and those who would otherwise be unable
to enter occupational skills training.

end insert begin insert

(F) To the extent feasible, utilize criteria that measure training
and education provider performance, including, but not limited
to, the following:

end insert begin insert

(i) Measures of skills or competency attainment.

end insert begin insert

(ii) Measures relevant to program completion, including
measures of course, certificate, degree, licensure, and program
of study rate of completion.

end insert begin insert

(iii) For those entering the labor market, measures of
employment placement and retention.

end insert begin insert

(iv) For those continuing in training or education, measures of
educational or training progression.

end insert begin insert

(v) For those who have entered the labor market, measures of
income, including wage measures.

end insert begin insert

(G) The division of labor for making initial and subsequent
eligibility determinations under this division shall be modeled on
the division of labor envisioned in the federal Workforce Investment
Act of 1998 in that the state board shall establish, with input from
local workforce investment boards and other stakeholders, the
initial and subsequent eligibility procedures and criteria utilized
by local workforce investment boards to assess training provider
performance. The local boards shall have the authority to place
and retain training providers on the list, and shall provide relevant
performance data pertaining to the training provider criteria
established pursuant to this division to a state agency designated
by the Governor. The relevant state agency shall also have the
authority to remove training providers for nonperformance,
provided they do not meet the performance criteria established
pursuant to this division.

end insert begin insert

(H) If the state receives a waiver from the federal subsequent
eligibility provisions specified in the federal Workforce Investment
Act of 1998, the state workforce investment board shall establish
its own subsequent eligibility criteria that take into account all of
the criteria specified in subparagraphs (A) to (G), inclusive.

end insert