BILL ANALYSIS                                                                                                                                                                                                    



                                                                            



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                                    THIRD READING


          Bill No:  SB 118
          Author:   Lieu (D)
          Amended:  As introduced
          Vote:     21

           
           SENATE LABOR & INDUSTRIAL RELATIONS COMMITTEE  :  4-0, 3/13/13
          AYES:  Lieu, Wyland, Leno, Lara
          NO VOTE RECORDED:  Padilla

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8


           SUBJECT  :    Unemployment insurance:  education and workforce  
          investment 
                      system

           SOURCE  :     Author


           DIGEST  :    This bill requires the California Workforce  
          Investment Board to incorporate specific principles into the  
          state's strategic plan that align the education and workforce  
          investment systems of the state to the needs of the 21st century  
          economy and promotes a well-educated and highly skilled  
          workforce to meet our future workforce needs.

           ANALYSIS  :    The federal Workforce Investment Act (WIA) of 1998  
          provides funding for job training and employment investment  
          programs in which states may participate, including work  
          incentive and employment training outreach programs.  Following  
          passage of the federal WIA, the state established the California  
          Workforce Investment Board (CWIB) and charged the CWIB with the  
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          responsibility of developing a unified, strategic planning  
          process to coordinate various education, training, and  
          employment programs into an integrated workforce development  
          system that supports economic development.  There are 49 Local  
          Workforce Investment Boards that plan and oversee the workforce  
          investment system at the local level.  

          Existing law requires the CWIB, in collaboration with specified  
          state and local partners, and the local WIBs to develop a  
          strategic workforce plan, updated at least every five years, to  
          address the state's economic, demographic, and workplace needs.

          Among its other responsibilities, the CWIB develops protocols to  
          ensure that policies are developed with full public input and  
          discussion.  The CWIB is also responsible for establishing  
          criteria for development of (1) the formulae to be used for  
          allocating funds to the local areas, (2) dissemination of the  
          Governor's 15% WIA discretionary funding, and (3) certification  
          and re-certification of local WIBs.  The CWIB also provides  
          recommendations to the Governor on policy and vision for the  
          statewide employment statistics system.  

          This bill requires the CWIB to incorporate specific principles  
          into the state's strategic plan that align the education and  
          workforce investment systems of the state to the needs of the  
          21st century economy and promotes a well-educated and highly  
          skilled workforce to meet our future workforce needs. 

          This bill:

          1. Establishes six principles to guide the state's workforce  
             investment system that include:

             A.    Programs and services must be responsive to the needs  
                of employers, workers, and students, as specified. 

             B.    Encourage state and local WIBs to collaborate with  
                other public and private institutions to adopt local and  
                regional training and education strategies across all  
                delivery systems. 

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

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             D.    Develop strong partnerships with the private sector,  
                ensuring industry involvement in needs assessment,  
                planning, and program evaluation.

             E.    Making investments outcome oriented and accountable,  
                measuring results through program completion,  
                employment, and earnings. 

             F.    Making programs and services accessible to employers,  
                workers, and students, including individuals with  
                employment barriers, such as persons with economic,  
                physical, or other barriers to employment.

          2. Directs the CWIB to:

             A.    Target resources towards high-wage competitive and  
                emerging industry sectors that have a significant  
                economic impact on the state, have immediate education  
                and workforce development needs, and have documented  
                career opportunities.  

             B.    As part of its strategic workforce plan, create a  
                California Industry Sector Initiative to provide a  
                framework for state workforce investments and support  
                for sector strategies.

             C.    By considering the expertise of local WIBs, annually  
                identify industry sectors with a competitive economic  
                advantage and annually conduct skills-gap analyses  
                enumerating occupational and skills shortages in the  
                industries identified as having strategic importance to  
                the state. 

             D.    Establish, with input from local WIBs and other  
                stakeholders, initial and subsequent eligibility  
                criteria for the WIA Eligible Training Provider List  
                (ETPL) that effectively directs training resources into  
                training programs leading to employment in high-demand,  
                high-priority, and high-wage occupations, as specified. 

          3. Provide definitions for specific terms used in the bill,  
             including, "career pathways," "sector strategies," "industry  
             sectors" and "economic security," among others.

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           Comments



          Eligible Training Provider List  :  California's ETPL was  
          established in compliance with the WIA.  The purpose of the ETPL  
          is to provide customer-focused employment training for adults  
          and dislocated workers.  Training providers who are eligible to  
          receive Individual Training Accounts (ITAs) through CWIA Title  
          I-B funds are listed on the ETPL.  California's statewide list  
          of qualified training providers offers a wide range of  
          educational programs, including classroom, correspondence,  
          Internet, broadcast, and apprenticeship programs.

           Existing law requires the establishment of two separate  
          procedures for the ETPL  :  Initial eligibility and subsequent  
          eligibility.  California has been granted a waiver of the  
          requirement for subsequent eligibility specified in WIA Section  
          122(c)(5) and Title 20 of the Code of Federal Regulations  
          Section 663.530.  This current federal waiver allows providers  
          and programs to remain on the State ETPL indefinitely as long as  
          their initial eligibility is still valid. 

          According to an Employment Development Department (EDD)  
          information notice to the workforce development community, it  
          was notated that the current ETPL contained more than 5,000  
          program/providers that never had a WIA client referred to them,  
          nor had the programs been validated for at least two years.  In  
          an effort to meet the terms of the waiver pertaining to  
          subsequent eligibility, the Workforce Services Division had to  
          deactivate all existing ETPL programs that were more than two  
          years old (i.e. initial approval date prior to January 1, 2010)  
          and did not have a single WIA client referred to them during  
          their tenure on the ETPL.  However, if the local board  
          determines that an unused program/provider should be reactivated  
          and remain on the ETPL, a verification must be done at the local  
          level to ensure that the data on the inactive ETPL is valid and  
          that this program/provider is a not a duplication of an existing  
          program/provider on the ETPL.

           California State Auditor Report on Federal WIA  :  A March 2012  
          report, "Federal Workforce Investment Act:  More Effective State  
          Planning and Oversight Is Necessary to Better Help California's  

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          Job Seekers Find Employment," evaluated the state's  
          administration of WIA funding.  


          Among its finding, the audit revealed that: 


           More than five years after state law required the CWIB to  
            develop a strategic workforce plan to serve as a framework for  
            public policy, fiscal investment, and state labor programs to  
            address workforce needs; it has failed to do so and thus, has  
            not provided sufficient guidance to its workforce development  
            partners. 


           Both EDD and the CWIB can do more to assess the quality of  
            services - neither has a mechanism to evaluate whether an  
            appropriate match exists between a participant's skills,  
            education, and experience and the employment the participant  
            attains. 

           Although the CWIB is building partnerships with various  
            entities to coordinate workforce investment planning, it has  
            done little to ensure that the one-stop delivery system does  
            not duplicate services for program participants. 

          The State Auditor made several recommendations in the report,  
          including one that the Legislature consider establishing a due  
          date for the CWIB to develop a strategic workforce plan, and  
          clarify the roles and responsibilities of the CWIB and EDD.  The  
          State Auditor also made recommendations to the CWIB aimed at  
          developing, overseeing, and continuously improving California's  
          workforce investment system by collaborating with state and  
          local workforce partners and clearly defining terminology and  
          identifying state-specific performance measures.  

          According to the report, the Labor Agency, the CWIB, and the EDD  
          agreed with the recommendations.  In 2012, the CWIB went through  
          many changes, including the introduction of new membership on  
          its board.  CWIB has taken several steps to address the concerns  
          raised by the audit, including incorporating some of the  
          requirements included in this bill.

          Prior Legislation  :

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          SB 698 (Lieu), Chapter 497, Statutes of 2011, requires the  
          Governor to establish, through the California WIB, standards for  
          certification of high-performance local WIBs, in accordance with  
          specified criteria. 

          SB 734 (DeSaulnier), Chapter 498, Statutes of 2011, requires  
          local WIBs to spend a certain percentage of available WIA funds  
          (25% now and increased to 30% in 2016) on workforce training  
          programs.  A Local WIB that does not meet the expenditure must  
          provide the EDD with a corrective action plan.

          AB 3018 (Nunez), Chapter 312, Statutes of 2007, enacts the  
          California Green Collar Jobs Act of 2008, which creates the  
          Green Collar Jobs Council within the CWIB to perform specified  
          tasks related to addressing the green economy workforce needs of  
          the state. 

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  4/8/13)

          Association of California Healthcare Districts 
          California Hospital Association 
          California Labor Federation
          California Manufacturers & Technology Association 
          California State Association of Electrical Workers 
          California State Pipe Trades Council
          California Workforce Association 
          City of Long Beach
          Council of California Goodwill Industries 
          EDGE Coalition 
          Jewish Vocational Services of San Francisco 
          National Skills Coalition 
          South Bay Association of Chambers of Commerce 
          State Building and Construction Trades Council of California 
          Torrance Chamber of Commerce 
          Western States Council of Sheet Metal Workers 


           ARGUMENTS IN SUPPORT  :      According to the author's office,  
          workers in California are facing the toughest jobs crisis in  
          over 50 years and, unfortunately, at a time when workers,  

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          families and communities need more support, states are facing  
          unprecedented budget challenges.  The author's office argues  
          that now more than ever, it is crucial that every dollar of  
          workforce funds is invested in high quality employment services  
          that connect workers with good paying jobs.  

          Proponents argue that despite the state's high unemployment  
          rate, job openings in key industries are going unfilled because  
          employers cannot find workers with the necessary credentials and  
          training for these jobs.  They argue that this workforce  
          shortage has the potential of becoming a full blown crisis as  
          baby boomers continue to retire in increasingly high numbers.   
          In addition, many of these openings are "middle-skill" jobs,  
          which require education and training past high school.   
          According to proponents, 47% of jobs in California's labor  
          market are middle-skill, but only 38% of Californians likely  
          have the credentials and training for these jobs.  This bill  
          takes important steps to close this skills gap by providing new  
          principles to guide the work of the State WIB.


          PQ:d  4/9/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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