BILL ANALYSIS                                                                                                                                                                                                    ”



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          SENATE THIRD READING
          SB 118 (Lieu)
          As Amended  August 13, 2013
          Majority vote 

           SENATE VOTE  :35-3  
           
           LABOR & EMPLOYMENT      7-0     ECONOMIC DEVELOPMENT     8-0    
           
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          |Ayes:|Roger HernŠndez, Morrell, |Ayes:|Medina, Mansoor, Campos,  |
          |     |Alejo, Chau, Gomez,       |     |Daly, Fong, Fox, Linder,  |
          |     |Gorell, Holden            |     |Melendez                  |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
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           APPROPRIATIONS      17-0                                        
           
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          |Ayes:|Gatto, Harkey, Bigelow,   |     |                          |
          |     |Bocanegra, Bradford, Ian  |     |                          |
          |     |Calderon, Campos,         |     |                          |
          |     |Donnelly, Eggman, Gomez,  |     |                          |
          |     |Hall, Holden, Linder,     |     |                          |
          |     |Pan, Quirk, Wagner, Weber |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
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           SUMMARY  :  Requires the California Workforce Investment Board  
          (CWIB) to incorporate specific principles into the state's  
          strategic plan that align the education and workforce investment  
          systems of the state to promote a well-educated and highly  
          skilled workforce to meet the workforce needs.  Specifically,  
           this bill  : 

          1)Defines "sector strategy" as methods of prioritizing  
            investments in competitive and emerging industry sectors and  
            industry clusters on the basis of the labor market and other  
            economic data indicating strategic growth potential,  
            especially with regards to jobs and income, as specified. 

          2)Requires the state to develop a California Industry Sector  
            Initiative to serve as the cornerstone of the CWIB and provide  
            a framework for the state workforce investments and support  








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            for sector strategies.  

          3)Defines "industry sector" as 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.  

          4)Defines "industry clusters" as a geographic concentration or  
            emerging concentration of independent industries with direct  
            service, supplier, and research relationships, or independent  
            industries that share common resources in a given regional  
            economy or labor market, as specified.  

          5)Requires CWIB to work collaboratively with state and local  
            partners to identify ways of eliminating statewide barriers  
            and better align and leverage federal, state, and local  
            Workforce Investment Act (WIA) funding streams, as specified.   
            Further specifies targeted requirements to accomplish this.

          6)Specifies the division of labor for making initial and  
            subsequent eligibility determinations for the Eligible  
            Training Provider List (ETPL) shall be modeled on federal law  
            and include input from local workforce investment boards and  
            other stakeholders, as specified.  Local boards shall have the  
            authority to place and retain training providers on the list,  
            as specified.

          7)Makes other related changes and contains language to prevent  
            chaptering out issues with AB 285 (Brown) of the current  
            legislative session.

           FISCAL EFFECT  :   According to the Assembly Appropriations  
          Committee, there will be minor, absorbable administrative costs  
          to the Employment Development Department (EDD) to implement this  
          measure.  According to EDD, it currently collects the labor  
          market data necessary to implement the bill's requirements.  

           COMMENTS  :  There is broad consensus that better educated and  
          trained workers are more productive and more successful in labor  
          markets.  Specifically, targeting these efforts toward the job  
          sectors that are best positioned to make gains, if investments  
          are made, is vital and requires the use of current economic and  
          labor market data to determine what those sectors are.  "Sector  
          strategies" are policy initiatives designed to promote the  








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          economic growth and development of a state's competitive  
          industries using strategic workforce investments to boost labor  
          productivity.  

          When done successfully, sector strategies can lead to mutually  
          beneficial outcomes for business, labor, and the state by  
          increasing competitiveness and growth, improving worker  
          employability and income, and reducing the need for social  
          services while also bolstering government revenues generated by  
          both business and workers.

          A March 2012 report from the California State Auditor, "Federal  
          Workforce Investment Act: More Effective State Planning and  
          Oversight Is Necessary to Better Help California's Job Seekers  
          Find Employment," evaluated the state's administration of WIA  
          funding.  

          The State Auditor made several recommendations in the report,  
          including one that the Legislature should consider establishing  
          a due date for the CWIB to develop a strategic workforce plan,  
          and clarify the roles and responsibilities of the CWIB and the  
          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.  
           The CWIB has begun taking steps to address some of the concerns  
          raised by the audit.

          The author believes it is important to update the  
          responsibilities of the CWIB to address our changing economy and  
          encourage a more strategic approach to training for future  
          workforce needs.  

          Please see the policy committee analysis for more detailed  
          information.


           Analysis Prepared by  :    Lorie Alvarez/ L. & E. / (916) 319-2091  



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