BILL ANALYSIS Ó AB 2412 Page 1 Date of Hearing: May 4, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2412 (Chang) - As Amended March 17, 2016 ----------------------------------------------------------------- |Policy |Higher Education |Vote:|13 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill establishes an incentive grant program for the completion of industry-recognized credentials at the California Community Colleges (CCC), commencing with the 2017-18 academic year. Specifically, this bill: 1)Establishes an incentive grant program, to be administered by the California Community Colleges Chancellor's Office (CCCCO), AB 2412 Page 2 for the completion of credentials at CCC campuses. The credentials would be in high-demand occupational areas as identified by the CCCCO, working with local workforce boards, businesses, industry, the Employment Development Department, and the California Workforce Development Board. 2)Requires the CCCCO to provide each participating CCC campus with grants of $1,000 for each credential earned by a CCC student in one of the occupational areas identified per (1). 3)Requires grant funds to be used to improve its workforce development and career technical education programs by upgrading equipment, purchasing supplies, expanding programs, or for any other use that would improve campus workforce education and career technical education programs. Grant funds cannot be used to fund the salaries or benefits of personnel in recipient departments. 4)Requires the CCCCO to report to the Legislature on the program by December 1, 2018 and every three years thereafter. FISCAL EFFECT: 1)Annual costs for the incentive grants would depend on the number of occupations identified by the Chancellor's Office as high-demand and the number of students completing credentials in these occupations. Costs would probably be at least several million dollars annually. According to the CCCCO, 90,821 students completed a CTE certificate or degree. If only 10% of these degrees were in high-demand occupations, costs for incentive grants would exceed $9 million (GF-Prop 98). 2)Administrative costs for one position at the Chancellor's AB 2412 Page 3 Office would be about $120,000 annually. [General Fund] COMMENTS: 1)Purpose. According to the CCCCO, employers currently struggle to find workers who possess the necessary skills to fill job openings, and this skills gap is projected to grow. By 2025, 30% of all job openings in California (1.9 million) will require some form of postsecondary education short of a four-year degree. California's education pipeline is not keeping pace with the higher levels of skills and education required by employers and must significantly increase the number of individuals with industry-valued, middle-skill degrees, certificates and credentials. The author argues that, "enactment of this legislation will prompt important change within the community college system to put greater emphasis on career technical education and workforce development." 2)Governor's Budget Proposal. The Governor has earmarked $200 million in the CCC's 2016-17 budget to establish the Strong Workforce Program, which is designed to allow CCC campuses to expand access to career technical education courses and programs and to implement a regional planning and accountability structure to meet regional workforce needs. 3)Comments. The program envisioned in this bill seems to be AB 2412 Page 4 ongoing, but this is unclear. While the program is characterized as an incentive program, and is geared toward high- demand occupations, a participating college's grant amount appears to be based on past performance, i.e. the number of students having completed credentials in the identified occupations. There does not seem to be any requirement that participating colleges increase the number of students completing credentials in these occupations. Analysis Prepared by:Chuck Nicol / APPR. / (916) 319-2081