BILL ANALYSIS Ó
AB 1270
Page 1
Date of Hearing: April 21, 2015
ASSEMBLY COMMITTEE ON JOBS, ECONOMIC DEVELOPMENT, AND THE ECONOMY
Eduardo Garcia, Chair
AB 1270
(Eduardo Garcia) - As Amended April 6, 2015
SUBJECT: California Workforce Innovation and Opportunity Act
SUMMARY: Updates the California statute to reflect the new
requirements of the federal Workforce Innovation and Opportunity Act
of 2014. While the bill makes conforming changes to state law, it
also maintains core state policies related to:
1)The significance of regional economies and sector strategies;
2)Preparation of a workforce ready to support dominant and emerging
industries; and
3)The development of career pathways that provide workers with
economic security and career advancement.
In addition, the bill retains recently enacted state workforce
initiatives, including those designed to establish workforce data and
measurement metrics, incentivize high performing boards, and set
minimum local training expenditures.
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EXISTING LAW establishes the California Workforce Investment Board
(CWIB), comprised of members appointed by the Governor and the
appropriate presiding officer(s) of each house of the Legislature, and
specifies that the executive director of the CWIB report to the
Secretary of the California Labor and Workforce Development Agency.
The CWIB is responsible for assisting the state in meeting the
requirements of the federal Workforce Investment Act of 1998 (WIA), as
well as assisting the Governor in the development, oversight, and
continuous improvement of California's workforce investment system.
FISCAL EFFECT: Unknown
POLICY ISSUE FRAME:
The federal Workforce Innovation and Opportunity Act of 2014
represents the most significant shift in federal workforce policy in
several decades. AB 1270 makes the changes necessary to conform to
the new federal law. The bill, however, takes a strategic approach by
retaining recently enacted state workforce policies which are not
otherwise prohibited under the new federal act.
Information has been included in the Comment section of the analysis
on the California Workforce Investment Board, the new federal
Workforce Innovation and Opportunity Act, evolving workforce needs in
a globally linked economy, and related legislation. Comment 5
includes a list of recommendations submitted to the Committee on
realigning the state's education and workforce systems, including the
implementation of the Workforce Innovation and Opportunity Act.
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COMMENTS:
1)Author's Purpose: According to the author's statement, "AB 1270
substantively updates California law to reflect the changes
necessary to conform with the federal Workforce Innovation and
Opportunity Act."
2)WIA and the California Workforce Investment Board: Enacted in 1998,
WIA provides states with federal funding for job training and
employment investment activities and programs, including work
incentive and employment training outreach programs. Distribution
of the funds is based on a set formula which includes specified
economic and demographic data and flows to the state through three
primary programs: Adult, Youth, and Dislocated Workers.
California's WIA allocation from the U.S. Department of Labor has
declined over the years from a high of $630 million in 2000-01 to
$391 million in 2014-15. Federal law dictates that 85% of Adult
and Youth formula funds, and 60% of Dislocated Worker formula funds,
are distributed to local workforce investments boards (LWIBs).
Funding for the state's activities is derived from the 15% WIA
discretionary funds.
California will receive approximately $390 million in Program Year
2014-15, $356 million is allocated to the LWIBs to provide services
for adults, laid-off workers, and youth, and $34 million will remain
at the state-level for program oversight and discretionary programs.
Discretionary funding in 2015-16 is expected to increase and will be
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detailed in the May Revision.
California's WIA dollars are overseen by the 56-member CWIB, of
which 61% of the members represent the private sector, as required
by federal law. The CWIB has a staff of 17 authorized positions and
is currently led by Executive Director Tim Rainey. In 2008, CWIB
established the Green Collar Jobs Council to address the workforce
development needs of the emerging clean and green economy.
Among its primary duties, the CWIB provides guidance to LWIBs and is
responsible for the development of a unified, strategic plan to
coordinate various education, training, and employment programs that
result in an integrated workforce development system that supports
economic development. The plan is required to be updated at least
every 5 years in order to address the state's changing economic,
demographic, and workplace needs. The most recent plan was
submitted to the federal Department of Labor in April 2013 and
approved after consultation and modest revisions in June 2013.
California's Strategic Workforce Development Plan 2013-2017 -
"Shared Strategy for a Shared Prosperity," prioritizes regional
coordination among key partners, sector-based employment strategies,
skill attainment through "earn and learn" and other effective
training models (including, but not limited to apprenticeship), and
development of career pathways.
Based on the framework of the state plan, in July 2013, the LWIBs
submitted local workforce investment plans for the CWIB's review.
Key among the policy enhancements in the current state and local
plans are strengthened performance indicators to allow for ongoing
monitoring of the plan's success. There are 49 LWIBs that plan for
and oversee the workforce investment system at the local level.
Each LWIB also has one or more One-Stop Centers, which provide
access to career information, counseling, and funding for education,
training and supportive services.
3)Federal Workforce Innovation and Opportunity Act: The federal
Workforce Innovation and Opportunity Act was signed into law on July
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22, 2014 and represents the single most significant change in
federal workforce policy in over 15 years.
The Workforce Innovation and Opportunity Act supersedes the federal
Workforce Investment Act of 1998, which expired under its own terms
in 2003. The new federal Act also amends the Adult Education and
Family Literacy Act, the Wagner-Peyser Act, and the Rehabilitation
Act of 1973.
The structure of the federal Workforce Innovation and Opportunity
Act, calls for phased implementation with few programmatic changes
in the initial year. It is envisioned that states will use this
time for engagement with stakeholders to develop their regional and
state plans that will drive future workforce development activities.
Most provisions take effect on July 1, 2015, which is the first
full program year after enactment. The new state plans and
performance accountability system will become effective July 1,
2016.
The CWIB established a 14-member Workforce Innovation and
Opportunity Act Implementation Work Group (Work Group) in September
2014 for the purpose of seeking stakeholder input in the development
of performance measures and multi-agency metrics, strategies for
aligning the state's education and workforce training systems,
models for regional collaboration, and making recommendations that
will remove systemic and institutional barriers to change.
The California Labor Agency is sponsoring two measures to provide
the necessary changes to existing workforce development statutes to
conform to the new federal guidelines under the Workforce Innovation
and Opportunity Act. AB 1270 is intended to be a one-year bill that
makes only the most necessary changes to meet the requirements of
the federal law. SB 45 (Mendoza) is intended to be a two-year bill
and serve as the vehicle for the longer range policy discussions on
implementing key discretionary elements of the federal act.
Contributions from the Work Group and the Legislature, as well as
other stakeholder engagements will help form the basis of the
recommended changes to SB 45.
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1)Federal Regulations: The National Skills Coalition has undertaken
an initial review of the five notices of proposed rulemaking issued
by the Departments of Labor (DOL) and Education (ED) governing the
implementation and administration of federal Workforce Innovation
and Opportunity Act. A selection of highlights and issues
identified by the National Skills Coalition are provided below.
Small Business Participation: Sections 679.110(b)(3)(i)(D)
and 679.320(b) propose that at least one member of the state
board and at least two members of the local board must represent
small business.
Sector Partnerships: Sec. 134(c) of WIOA identifies the
development, convening, or implementation of industry or sector
partnerships as a required local employment and training
activity; however, the regulations offer limited guidance as to
how this aspect of the law should be implemented at the local
level, and provides relatively little guidance on how state
boards can support the development and expansion of sector
partnerships.
Career Pathways: WIOA requires state boards to develop career
pathways strategies and the local boards to develop and implement
career pathways. The law further requires that adult education
must be aligned with the other core programs to develop career
pathways. While proposed §679.370(f) reiterates the WIOA
requirement that local boards lead efforts to develop career
pathways with representatives of secondary and postsecondary
education programs, the regulations are less clear on the role of
adult education as a partner in the development and
implementation of career pathways.
Business Services: The notice of prosed rule making describes
business services that must be provided through the one-stop
system. Industry sector strategies, customized assistance in
developing a registered apprenticeship program, career pathways,
skills upgrading, and skill standard development are included in
a list of allowable activities that may be provided by business
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intermediaries or by using economic, philanthropic, and other
public and private resources (§678.435(c)).
Pre-Apprenticeships: §681.480 defines pre-apprenticeship as
"a program or set of strategies designed to prepare individuals
to enter and succeed in a registered apprenticeship program and
has a documented partnership with at least one, if not more,
registered apprenticeship program(s)." The definition is based on
the definition of a quality pre-apprenticeship included in
Training and Employment Notice (TEN) No. 13-12. WIOA did not
include a definition for pre-apprenticeship.
Incumbent Worker Training: WIOA permits up to 20 percent of
local adult and dislocated worker funds to be used for incumbent
worker training (IWT). DOL suggests that an ideal incumbent
worker training scenario is one where a worker acquires skills
that allow them to advance in their employment within the company
and allows the company to backfill the incumbent worker's
position.
Integrated Education and Training: Articulates the required
elements for integrated education and training programs, and
proposes how such programs can show that they meet the
requirement to be "for the purpose of educational and career
advancement (§463.38)."
English Language Acquisition Programs: Solicits public comment
on how English language acquisition programs can satisfy the
requirement that they lead to attainment of a high school diploma
and transition to postsecondary education or employment
(§463.32).
Youth Work Experiences: DOL suggests the WIOA requirement that
20 percent of youth formula funds must be spent on work
experiences for youth, is, "arguably the most important element
as signaled by the minimum expenditure requirement." Section
681.620 clarifies that summer youth employment is no longer
required under WIOA (although it remains a permissible work
experience activity).
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The proposed regulations will officially be published in the federal
register on April 16, 2015, with public comment due 60 days later.
1)Tracking Recommendations: Below is a list of recommendations for SB
45 on California's implementation of the federal Workforce
Innovation and Opportunity Act or other measures before the
Legislature that contribute to the stronger alignment of the state's
education and workforce systems. The list includes recommendations
from the informational hearings held by the Assembly Committee on
Jobs, Economic Development and the Economy (JEDE) in February and
March 2015, as well as other comments submitted to stakeholder
groups. JEDE will continue to track recommendations and provide the
list to stakeholders, as requested.
a) California should utilize, among other resources, the
Innovation Hubs and their preexisting relationships with industry
when seeking private sector input on nontraditional
apprenticeships, industry-recognized certificates, and other
issues related to private sector engagement on workforce
development.
b) Regions should be based on economic development patterns.
c) Regional boundaries should recognize that a local workforce
investment board may be serving more than one region.
d) California's new and better aligned education and workforce
system should recognize the importance of public high school
diplomas being offered by California's WASC-accredited drop-out
recovery high schools including those operated by SIATech and
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YouthBuild.
e) Given the size and range of issues facing California youth,
workers, and businesses, California's regional plans should
embrace and integrate, where appropriate, the full range of
local, state, and national programs that are designed to serve
targeted populations including, but not limited to, Youth Build,
Jobs Corps, and other Education Code Section 47612.1 programs
serving out-of-school youth.
f) In developing policies that support innovation-based
industries and the timely completion of certificates and two-year
degrees, certain technology and science-based course content
should be available for credit by exam on a statewide basis.
These credits would not be subject to the current residency
requirement of 12 units.
g) The California Partnership Academy Program has the highest
multiple year retention rate of students through a career
sequence of any of the programs serving youth. Workforce
investment boards should consider how the California Partnership
Academies can serve youth in their region, including integrating
summer youth employment programs that serve eligible students
enrolled in these academies, as well as other internships and
mentoring programs.
h) Include an assessment process and criteria for one-stop
systems, including site reviews, in any high performing board
designation, as well as a deep partnership with CWA in the
development of the high-performing board process.
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i) Provide access on Wagner-Peyser budgets and staffing plans for
each co-location site to local boards, and instruct EDD to
examine Wagner-Peyser job descriptions so that staff in each
co-located site can perform duties necessary to achieve the
vision of local, regional and state plans as well as the vision
of the system through WIOA.
j) Community Colleges should be given a waiver on data reporting
for the first two years of WIOA as they develop methods and
collection needed to bring their data in line with the
requirements of the law.
aa) The state should allow one-stop operators and career service
providers to be staffed by workforce boards and/or agencies
designated by the chief local elected official's organizations
(with the Governor's written approval, as required by federal
law). The approval should take place through the local planning
process.
bb) Local Boards should be allowed to utilize unused Rapid
Response funding that is currently present with the local areas
to fund transition activities to WIOA, as outlined in Federal
TEGL 26-14.
6)The California Economy in the Future: As California continues to
transition from the recession, businesses and workers face an
economy comprised of highly integrated industry sectors that are
also more geographically dispersed. Advances in technology and
processes are occurring more rapidly. This is resulting in
competitiveness being increasingly defined in terms of speed,
flexibility, specialization, and innovation. These changes are
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placing new challenges on California's training and workforce
system.
Economists have identified nine key trends (see chart) that will
most influence the U.S. and California economies. Several of these
trends will have particularly significant impacts on workforce
development.
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| | Key Economic Trends Affecting the California Economy |
|--+-------------------------------------------------------------|
|1 |Cities and regions will become more dominant economic |
| |players. |
| | |
| | |
|--+-------------------------------------------------------------|
|2 |Global networks will be supported through more advanced |
| |information and transportation technologies. |
| | |
| | |
|--+-------------------------------------------------------------|
|3 |Barriers to trade will continue to decline among both |
| |developed and emerging economies. |
| | |
| | |
|--+-------------------------------------------------------------|
|4 |The world's largest companies will increasingly be |
| |headquartered in emerging foreign markets. |
| | |
| | |
|--+-------------------------------------------------------------|
|5 |Global and more diversified markets will provide new |
| |opportunities for entrepreneurs and smaller size businesses. |
| | |
| | |
|--+-------------------------------------------------------------|
|6 |Scarcity and rising prices will increase pressure on the |
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| |development and deployment of cleaner technologies. |
| | |
| | |
|--+-------------------------------------------------------------|
|7 |Deepening income inequality will result in costly outcomes, |
| |most adversely affecting women, minorities, immigrants, the |
| |disabled, and the formerly incarcerated, and thus require |
| |the diversion of public resources to address unemployment, |
| |poverty, and social unrest. |
| | |
| | |
|--+-------------------------------------------------------------|
|8 |The retirement of Boomers will place an even greater need |
| |for middle- and high-skilled workers. |
| | |
| | |
|--+-------------------------------------------------------------|
|9 |The U.S workforce will be smaller, more ethnically |
| |diversified, and have educational backgrounds that are lower |
| |than many other developed economies. |
| | |
| | |
----------------------------------------------------------------
-----------------------------------------------------------------
| Source: Researched and compiled from various sources by the |
| Assembly Committee on Jobs, Economic Development, and the |
| Economy|
| |
| |
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The rise of smaller businesses is one of these trends. Due to their
ability to provide innovative technologies and help other businesses
access global markets, small businesses, and the entrepreneurs that
lead them, are vital economic players. These small and adaptable
businesses will have an inherent advantage in the post-recession
economy, provided they are able to learn the skillsets necessary to
run a successful business and have access to appropriately trained
workers.
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Another key economic trend is the rising importance of regional
economies as one of the primary drivers of economic growth. The
economic foundation of many strong regional economies are
innovation-based industry clusters which have the ability to support
high-paying jobs, lucrative career ladders, and longer term job
stability. Economic researchers have shown that industry clusters
rise in areas where local universities, research labs, and competing
businesses within the same industry provide a critical mass of
skilled workers. Though the economic composition of regions may
differ in California, each region has strengths and weaknesses. The
effective identification and cultivation of these industry strengths
will factor heavily on the future economic success of California's
regional economies.
Advances in information technology and the need to have more
environmentally sustainable products will also influence the basic
education and training needs of California workers. Even
entry-level workers will be expected to have important soft skills,
such as the ability to work in teams, actively listen, communicate
effectively with co-workers and bosses, and be able to negotiate
workplace needs in a positive manner. Unlike hard skills, which are
about a person's ability to perform a certain task or activity, soft
skills provide the tools necessary to learn and advance in the
state's continually evolving workplace environment.
Many of these new market realities are already coming into fruition
and, for now, California's workforce is underprepared to meet these
demands. There are still numerous unemployed and underemployed
workers in California, while, simultaneously there are businesses
reporting that they are unable to find qualified workers to fill
empty positions. Strong early education programs, career technology
pathways, accessible higher education, and effective and timely
workforce development programs are key to equipping California
workers with the skillsets that are in demand.
7)Current Employment Trends in California: Employment trends in
California over the past year point to an improving economy that is
growing at a rate exceeding the national average. The chart below
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illustrates that employment in California was up from the prior year
and that the state experienced a drop in unemployment that exceeds
14%.
---------------------------------------------------------------
| California and U.S. Labor Force Trends |
---------------------------------------------------------------
---------------------------------------------------------------
| |California Labor Force |U.S. Labor Force Trends |
| |Trends (seasonally |(seasonally adjusted) |
| |adjusted) | |
---------------------------------------------------------------
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
| |February |February 2015 |% Change |February |February 2015 |% Change |
| |2014 | | |2014 | | |
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|Population | 30,022,000| 30,370,000| 1.2%| 247,085,000| 249,899,000| 1.1%|
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|Labor Force | 18,710,000| 18,943,000| 1.2%| 155,688,000| 157,002,000| 0.8%|
--------------------------------------------------------------------------------------------------------
|Employment | 17,218,000| 17,668,000| 2.6%| 145,301,000| 148,297,000| 2.1%|
|--------------+--------------+--------------+--------------+--------------+--------------+--------------|
|Unemployed | 1,492,000| 1,275,000| -14.5%| 10,387,000| 8,705,000| -16.2%|
--------------------------------------------------------------------------------------------------------
---------------------------------------------------------------
|Source: California Labor Market Review, October |
|2014 |
| |
| |
| |
---------------------------------------------------------------
The Employment Development Department reports that civilian
employment was up 426,000 (2.5%) jobs from the prior year. All 11
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nonfarm industry sectors in California gained jobs between October
2013 and October 2014: construction (5.3%); professional and
business services (4.5%); mining and logging (4.3%); information
(3.9%); educational and health services (2.9%); leisure and
hospitality (2.4%); trade, transportation and utilities (1.6%);
financial services (0.6%); manufacturing (0.3%); government (0.2%);
and, other services (0.1%).
EDD currently projects that the number of employed persons in
California will reach 18,511,200 by 2020, an increase of about 11.2%
from 2013. Roughly 70% of all projected nonfarm job growth is
expected to be concentrated in four industry sectors: professional
and business services; educational services, healthcare, and social
assistance; leisure and hospitality; and retail trade. Many of
these high growth industry subsectors require specialized training,
such as employment related to nursing and residential care
facilities, technical consulting services, and computer system
designs.
8)Related Legislation: Below is a list of bills from the current and
prior sessions.
a) AB 285 (Brown) Scope of Practice for the California Workforce
Investment Board: This bill would have required the California
Workforce Investment Board to make recommendations and provide
technical assistance on entrepreneurial training opportunities
that could be made available through local workforce investment
boards. The bill would have also deleted certain required duties
of the California Workforce Investment Board and made changes to
the definition of microenterprise. Status: Vetoed by the
Governor, 2013. Small businesses and entrepreneurial training
was included in later legislation.
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b) AB 1093 (E. Garcia and Hernández) Workforce Innovation and
Opportunity Act: This bill makes modifications to the Supervised
Population Workforce Training Grant Program, which is
administered by the California Workforce Investment Board, for
the purpose of expediting the allocation of funds in the 2014-15
fiscal year. Status: Scheduled to be heard in the Assembly
Committee on Jobs, Economic Development, and the Economy on April
21, 2015.
c) SB 45 (Mendoza) Workforce Innovation and Opportunity Act:
This bill makes necessary changes to existing workforce
development statutes in code to conform to the new federal
guidelines under the Workforce Innovation and Opportunity Act.
The bill is sponsored by the California Labor Agency. Status:
Pending on the Senate Floor.
d) SB 118 (Lieu) Education and Workforce Investment Systems:
This bill required the California Workforce Investment Board to
incorporate specific principles into the state's strategic plan
to 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 the state's
future workforce needs. Status: Signed by the Governor, Chapter
562, Statutes of 2013.
e) SJR 10 (Lieu) Reauthorization of Workforce Investment Act of
1998: This resolution urges the U.S. Congress to reauthorize the
federal Workforce Investment Act of 1998, and for Congress to
include policies that provide adequate funding and encourage
cooperation between state or local workforce investment boards
and their clientele. Status: Adopted by the Legislature,
Chapter 121, Statutes of 2013.
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9)Double Referral: The Assembly Rules Committee has referred this
measure to the Assembly Committee on Labor and the Assembly
Committee on Jobs, Economic Development and the Economy. This
measure passed the Assembly Committee on Labor on a 6 to 0 vote.
REGISTERED SUPPORT / OPPOSITION:
Support
California Labor and Workforce Development Agency (sponsor)
California Chamber of Commerce
California Manufacturers and Technology Association
California Primary Care Association
California Workforce Association
SIATech
Opposition
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California Right to Life Committee
Analysis Prepared by:Toni Symonds / J., E.D., & E. / (916) 319-2090