BILL ANALYSIS                                                                                                                                                                                                    Ó





          SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
                             Senator Tony Mendoza, Chair
                                2015 - 2016  Regular 

          Bill No:               AB 509       Hearing Date:    July 13,  
          2015
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          |Author:    |Perea                                                |
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          |Version:   |June 23, 2015                                        |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|Alma Perez-Schwab                                    |
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             Subject:  California Private Postsecondary Education Act of  
                                  2009: exemptions.


          KEY ISSUES
          
          Should the Legislature exempt pre-apprenticeship programs  
          offered on behalf of one or more Division of Apprenticeship  
          Standards approved labor-management apprenticeship program from  
          oversight by the Bureau of Private Postsecondary Education if  
          they meet specified criteria? 

          Should Local Workforce Investment Boards be able to place these  
          pre-apprenticeship programs on the Eligible Training Provider  
          List - thereby allowing the use of federal workforce investment  
          funds to pay for these training programs and help meet their  
          minimum training requirements?  


          ANALYSIS
          
           Existing law  establishes the CA Private Postsecondary Education  
          Act (Act) of 2009, and requires the Bureau of Private  
          Postsecondary Education (Bureau) within the Department of  
          Consumer Affairs to, among other things, review, investigate and  
          approve private postsecondary institutions, programs and courses  








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          of instruction and authorizes the Bureau to take formal actions  
          against an institution/school to ensure compliance with the Act  
          and even seek closure of an institution/school if determined  
          necessary.  (Education Code §94800 et seq.)

           Existing law  exempts the following, among others, from oversight  
          by the Bureau:

             a)   An institution offering educational programs sponsored  
               by a bona fide trade, business, professional, or fraternal  
               organization, solely for that organization's membership.
             b)   A postsecondary educational institution established,  
               operated, and governed by the federal government or by this  
               state or its political subdivisions.
             c)   An institution offering either test preparation for  
               examinations required for admission to a postsecondary  
               educational institution or continuing education or license  
               exam preparation, as specified. 
             d)   An institution that does not award degrees and that  
               solely provides educational programs for total charges of  
               two thousand five hundred dollars ($2,500) or less when no  
               part of the total charges is paid from state or federal  
               student financial aid programs. 
           
          Existing law  establishes the California Workforce Investment  
          Board (CWIB) and charges the board with the 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. Existing law requires local chief elected officials  
          in a local workforce development area to form, pursuant to  
          specified guidelines, a Local Workforce Investment Board (Local  
          WIB) to plan and oversee the workforce investment system at the  
          local level.  (Unemployment Insurance §1400 et al) 
           
          Existing law  requires the CWIB, with input from Local WIBs and  
          other stakeholders, to establish initial and subsequent  
          eligibility criteria for the Eligible Training Provider List  
          (ETPL) that effectively directs training resources into 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 is required to use performance and outcome measures to  
          determine whether a provider is qualified to remain on the list.  








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          This Bill  would additionally exempt from the California Private  
          Postsecondary Education Act, preapprenticeship programs offered  
          by a bona fide organization, association or council that offers  
          programs on behalf of one or more Division of Apprenticeship  
          Standards approved labor-management apprenticeship programs, if  
          certain conditions are met. 

          Specifically, this bill:

             1)   Exempts from oversight by the Bureau of Private  
               Postsecondary Education labor-management preapprenticeship  
               programs that satisfy one of the following conditions: 

                  a.        It is not on the Eligible Training Provider  
                    List (ETPL) established and maintained by the  
                    California Workforce Investment Board (CWIB) but has  
                    met the requirements for placement on the list.

                  b.        It is on the ETPL established and maintained  
                    by the CWIB and meets the requirements for continued  
                    listing.

             2)   Provides that if an organization, association, or  
               council has been removed from the ETPL for failure to meet  
               performance standards, it is not exempt under these  
               provisions until it meets all applicable performance  
               standards.


          COMMENTS
          
          1.  The federal Workforce Innovation and Opportunity Act (WIOA): 

            The federal WIOA, passed by a wide bipartisan majority and  
            signed into law by President Barack Obama on July 22, 2014,  
            provides for workforce investment activities, including  
            activities in which states may participate and also contains  
            various programs for job and employment investment, including  
            work incentive programs, as specified. WIOA supersedes the  
            Workforce Investment Act of 1998 and aims to modernize our  
            workforce development system bringing together and enhancing  
            several key employment, education, and training programs. WIOA  
            also seeks to make the workforce system more comprehensive in  







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            its approach to service delivery and more responsive to the  
            demands of our economy.

            WIOA authorizes job training programs that include classroom  
            training, customized training, and on-the-job training.  
            Training funds are often distributed through vouchers to job  
            seekers to enroll in eligible training programs. Local  
            Workforce Investment Boards determine which training programs  
            are eligible to receive the vouchers.  Existing law requires  
            that at least 25% of federal WIA funds provided to Local WIBs  
            be spent on workforce training programs. This percentage  
            increases to 30% beginning in 2016. 

            Under federal law, workforce investment funds are distributed  
            to the states based on formulas that consider unemployment  
            rates and other economic and demographic factors.  California  
            and its 49 Local WIBs receive WIA formula funding from the  
            U.S. Department of Labor - 85 percent going to the Local WIBs,  
            with the remainder allocated for state discretionary purposes.  
            California receives between $350-400 million in federal WIA  
            dollars annually.

          2.  Background on the Eligible Training Provider List (ETPL):
           
            California's Eligible Training Provider List (ETPL) was  
            established in compliance with the Workforce Investment Act of  
            1998 for the purpose providing customer-focused employment  
            training for adults and dislocated workers. The qualified  
            training providers on the ETPL offer a wide range of  
            educational programs, including classroom, correspondence,  
            Internet, broadcast, and apprenticeship programs. Training  
            providers who are eligible to receive Individual Training  
            Accounts (ITAs) through WIA Title I-B funds are listed on the  
            ETPL. 

            The Employment Development Department (EDD) is responsible for  
            accepting information on training providers from Local WIBs,  
            compiling a single statewide list of eligible training  
            providers and disseminating the statewide ETPL to local boards  
            for distribution and use. Programs are required to be  
            periodically determined as eligible to continue on the ETPL.  
            This determination is to be made within 18 to 24 months of  
            their initial listing and annually thereafter. Under existing  
            law, at a minimum, initial and subsequent eligibility criteria  
            for placement on the ETPL shall consider the following:







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               a)     The relevance of the training program to the  
                 workforce needs of the state.
               b)     Needs to plug skills gasps and skills shortages at  
                 the state, local and regional levels. 
               c)     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.
               d)     The need for basic skills and bridge training  
                 programs that provides access to occupational skills  
                 training for individuals with barriers to employment and  
                 those who would otherwise be unable to enter occupational  
                 skills training.
               e)     To the extent feasible, utilize criteria that  
                 measure training and education provider performance,  
                 including, but not limited to, the following:
                    a.          Measures of skills or competency  
                      attainment and program completion. 
                    b.          Measures of employment placement and  
                      retention. 
                    c.          Measures for continued training or  
                      education. 
                    d.          For those that have entered the labor  
                      market, measures of income. 

            The Local WIBs are responsible for reviewing and verifying  
            applications submitted by training providers, determining if  
            the applicant meets the State's criteria for initial  
            eligibility and forwarding the information to EDD for training  
            providers and programs that meet the criteria. The EDD also  
            has the authority to remove training providers for  
            nonperformance. 
          3.  Background on the CA Private Postsecondary Education Act and  
            Bureau for Private Postsecondary Education:   

            After numerous legislative attempts to remedy the laws and  
            structure governing regulation of private postsecondary  
            institutions in California, AB 48 (Portantino, Chapter 310,  
            Statutes of 2009), established the Act and created the Bureau  
            for the purpose of regulating private postsecondary  
            educational institutions that provide educational services in  
            California. The Act requires all unaccredited colleges in  
            California to be approved by the Bureau, sets timelines for  







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            accreditation, and requires all nationally accredited colleges  
            to comply with numerous student protections. It is important  
            to note that not all private institutions are covered by the  
            Act; full and partial exemptions are provided for low-cost  
            programs, recreational schools, schools accredited by regional  
            accrediting agencies, among others. 

            The Bureau is required to actively investigate and combat  
            unlicensed activity and conduct outreach and education  
            activities for private postsecondary educational institutions  
            and students within the state.  The Act establishes processes  
            for penalties for non-compliance, providing the Bureau  
            authority to perform site visits and investigations, order  
            fines and student tuition refunds, and ultimately suspend or  
            revoke an institution's approval to operate. 

            Exemptions: Currently, construction trades unions that are  
            registered with the Joint Apprenticeship and Training  
            Committee of the Department of Industrial Relations, Division  
            of Apprenticeship Standards for purposes of their apprentice  
            training, are exempt from the Bureau for purposes of  
            apprenticeship programs.

          4.  Apprenticeship Programs and the Division of Apprenticeship  
            Standards: 

            According to the Division of Apprenticeship Standards (DAS),  
            apprenticeship is a system of learning while earning, and  
            "learning by doing" which combines training on the job with  
            related and supplemental instruction at school. Each program  
            operates under apprenticeship training standards in accordance  
            with State and Federal laws. In those crafts in which  
            management and labor organizations exist, each selects an  
            equal number of members to serve on the joint apprenticeship  
            committee which determines the standards for training and  
            supervises the training of apprentices. DAS approves and  
            administers apprenticeship law and enforces standards for  
            wages, hours, working conditions and the specific skills  
            required for state certification as a journeyperson in an  
            apprenticeable occupation. 

            Pre-apprenticeship services and programs are designed to  
            prepare individuals to enter and succeed in registered  
            apprenticeship programs. These programs have a documented  
            partnership with at least one registered apprenticeship  







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            program sponsor and together, they expand the participant's  
            career pathway opportunities with industry-based training  
            coupled with classroom instruction.

          5.  Need for this bill?

            In the Employment Training Provider List - Policy and  
            Procedures Directive from April 2014, the Employment  
            Development Department states that private postsecondary  
            education providers must receive approval to operate from the  
            Bureau of Private Postsecondary Education (BPPE) prior to  
            being listed on the ETPL. This approval ensures that the  
            provider satisfies the BPPE statutes and enables the provider  
            to enroll WIA eligible students.

            As noted above, the Division of Apprenticeship Standards (DAS)  
            has statutory authority over the approval and administration  
            of apprenticeship programs; however, statute doesn't include  
            any reference to pre-apprenticeship programs. According to the  
            author, DAS's legal counsel has opined that they can't  
            regulate pre-apprenticeship programs because statute does not  
            give them authority to do so.  Additionally, an institution  
            offering educational programs sponsored by a bona fide trade  
            organization solely for that organization's membership is  
            exempt from oversight by the Bureau of Private Postsecondary  
            Education; this includes apprenticeship programs that are  
            registered with DAS for purposes of apprentice training.  

            According to the author, who represents the Fresno Regional  
            WIB which has multi-craft pre-apprentice training being  
            conducted by the Fresno Madera Tulare Kings Building Trades  
            Council, this oversight in law has created a situation where  
            apprenticeship programs can be registered with DAS  
            (essentially receiving pre-approval under the BPPE) and then  
            added to the ETPL, but pre-apprenticeship programs they work  
            with cannot because DAS doesn't have regulatory authority over  
            them. This bill would exempt a bona fide organization,  
            association, or council that offers pre-apprenticeship  
            training programs, on behalf of one or more DAS approved labor  
            managed apprenticeship from the CA Private Postsecondary  
            Education Act. This would allow these institutions to be  
            placed on the ETPL, and receive WIA funds, without having to  
            obtain approval from the Bureau of Private Postsecondary  
            Education.  This will ensure that programs offering  
            pre-apprenticeships in conjunction with their apprenticeship  







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            programs are both exempt from BPPE oversight and added to the  
            ETPL. 

            Furthermore, by authorizing these pre-apprenticeship training  
            programs to be listed on the ETPL, it allows Local WIBs to use  
            federal WIA formula funds to pay for pre-apprenticeship  
            training in compliance with SB 734 (2012) which imposes a  
            minimum 25% training expenditure requirement on Local WIBs  
            carrying out WIA funded programs.  

          6.  Double Referral:  

            This bill was previously heard and passed by the Senate  
            Business, Professions and Economic Development Committee. 

          7.  Proponent Arguments  :
            
            According to the author, the WIA funds cannot be used to  
            conduct pre-apprenticeship programs because they are not on  
            the ETPL. However, the pre-apprenticeship programs are unable  
            to prove eligibility under the BPPE because legal counsel at  
            DAS has opined that pre-apprentice programs are not under  
            their jurisdiction. This leaves pre-apprentice training in  
            "limbo." The author argues that without an avenue for labor  
            managed pre-apprentice training to be eligible for WIA  
            funding, the programs go largely unfunded and Local WIB's  
            cannot use funding for these programs to meet their 25%  
            training expenditure requirement.

            The California Workforce Association is sponsoring the measure  
            and states that it will create parity between  
            pre-apprenticeship and apprenticeship programs offered by the  
            same institutions, as apprenticeship programs are already  
            exempt from the BPPE process.  The CWA asserts that this bill  
            will simply extend the exception to pre-apprenticeship  
            programs operated in conjunction with high-quality  
            apprenticeship programs, ensuring efficiency and continuity in  
            institutions' pre-apprenticeship and apprenticeship offerings.  
             

            Additionally, proponents state that pre-apprenticeship  
            programs are vital to maintaining a healthy workforce in  
            California since they prepare students for entrance into sate  
            approved apprenticeship programs.  California currently has  
            over 500 state approved apprenticeship programs, the vast  







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            majority being in the building and construction trades, and  
            they argue that joint labor-management programs make up 90% of  
            these. Proponents contend that these programs must already  
            meet stringent oversight requirements under the auspices of  
            the Division of Apprenticeship Standards, and exempting them  
            from the Private Postsecondary Education Act will help ensure  
            California continues to have a skilled labor workforce. 

          8.  Opponent Arguments  :

            The Associated Builders and Contractors of California are  
            opposed unless amended and argue that the bill strictly limits  
            who is provided an exemption from the CPPEA. The Labor Code  
            §3075(a) establishes who may sponsor an apprenticeship  
            program, including a joint apprenticeship committee, a  
            unilateral management or labor apprenticeship committee, or an  
            individual employer.  According to ABC, they had no issue with  
            the bill before the recent amendments which added the  
            restrictive term "labor-management" to the language; they  
            would remove opposition if the author would replace the term  
            or remove the words entirely. ABC argues that without  
            amendments, this bill means that fully qualified and DAS  
            approved unilateral programs will be given a higher barrier to  
            overcome than the exact same program that happens to be a  
            "labor-management" program. 

            Opponents also argue that since a pre-apprenticeship program  
            can partner with more than one DAS approved apprenticeship  
            program, this bill seems to be designed to keep these  
            pre-apprenticeship programs from partnering with all  
            state-approved apprenticeship sponsors. They believe this  
            discriminates against otherwise qualified apprenticeship  
            sponsors (and pre-apprenticeship programs that would  
            collaborate with them) and are seeking amendments. 


          SUPPORT
          
          California Workforce Association (Sponsor)
          Fresno, Madera, Kings & Tulare Building & Construction Trades  
          Council, AFl-CIO 
          Stanislaus, Merced, Tuolumne and Mariposa Counties Building and  
          Construction Trades Council 
          State Building and Construction Trades Council, AFL-CIO








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          OPPOSITION
          
          Air Conditioning Trade Association
          American Fire Sprinkler Association
          Associated Builders and Contractors of California
          Associated Builders and Contractors -San Diego Chapter
          Plumbing-Heating-Cooling Contractors Association of California
          Western Electrical Contractors Association


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