BILL ANALYSIS                                                                                                                                                                                                    Ó



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

          Bill No:            SB 45           Hearing Date:    March 25,  
          2015
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          |Author:    |Mendoza                                              |
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          |Version:   |March 9, 2015                                        |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|Alma  Perez-Schwab                                   |
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           Subject:  Workforce development:  federal Workforce Innovation  
                                 and Opportunity Act


          KEY ISSUES
          
          Should the Legislature pass legislation to conform California's  
          workforce development laws to the new federal Workforce  
          Innovation and Opportunity Act requirements in order to be  
          eligible to continue receiving federal workforce services  
          funding? 

          Should the Legislature require that Local Workforce Investment  
          Boards and chief elected officials develop strategic workforce  
          development plans around local regions to promote program  
          alignment and cooperation efforts that meet local needs?
          

          ANALYSIS
          
           The former federal Workforce Investment Act (WIA) of 1998   
          provided for activities and programs for job training and  
          employment investment in which states could 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 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.  







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           Existing law  requires the local chief elected officials in a  
          local workforce development area to form, pursuant to specified  
          guidelines, a Local Workforce Investment Board (LWIB) to plan  
          and oversee the workforce investment system at the local level.   
          There are currently 49 local WIBs in the state.  Each local  
          workforce area also created one or more One-Stop Centers, which  
          provide access to career information, counseling, funding for  
          education, training and supportive services.  (Unemployment  
          Insurance §1400 et al) 

           The federal Workforce Innovation and Opportunity Act (WIOA)  ,  
          signed into law on July 22, 2014, replaces the Workforce  
          Investment Act of 1998 and retains and amends the Adult  
          Education and Family Literacy Act, the Wagner-Peyser Act, and  
          the Rehabilitation Act of 1973.  Among other things, the new  
          federal WIOA is designed to help job seekers access employment,  
          education, training, and support services to succeed in the  
          labor market and to match employers with the skilled workers  
          they need to compete in the global economy. 

           This Bill  would make necessary changes to existing workforce  
          development statutes in code to conform to the new federal  
          guidelines under the Workforce Innovation and Opportunity Act  
          (WIOA). 

          Specifically, this bill would:

                 Direct the CA Workforce Investment Board to aid the  
               Governor in facilitating system alignment across the core  
               programs of the federal WIOA as well as other educational,  
               social service, rehabilitation, and economic development  
               agencies in the partnership. 

                 After consultation with local boards and chief elected  
               officials and in conformity with WIOA, require that the  
               state identify local planning regions.  

                 Require that the local boards and chief elected  
               officials in each planning region engage in regional  
               planning process that results in the following (among  
               others):









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                  o         The establishment of regional service  
                    strategies, including the use of cooperative service  
                    delivery agreements;
                  o         The development and implementation of sector  
                    initiatives for in-demand industries in the region;
                  o         The coordination of services with regional  
                    economic development services and providers;
                  o         The collection and analysis of regional labor  
                    market data;

                 The local boards and chief elected officials in each  
               region would be required to prepare and submit for  
               approval, a regional plan that includes description of the  
               activities described above. 

                 Lastly, the bill would incorporate relevant WIOA  
               definitions into CA statutes. 


          COMMENTS
          
          1.  Background on the CA Workforce Investment Board and WIA  
            Funding:

             Under federal law, WIA 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 through three revenue streams - Adult, Youth, and  
            Dislocated Workers.  Under federal law, 85 percent of Adult  
            and Youth formula funds, and 60 percent of Dislocated Worker  
            formula funds are distributed to local WIBs.  Fifteen percent  
            of Adult, Youth, and Dislocated Worker formula funds (15%  
            discretionary funds) are allocated to the state for a variety  
            of discretionary uses. This split in funds usage has changed  
            in recent years due to federal budgetary restrictions and  
            reductions so that the state generally gets less than the 15%  
            discretionary funds. California receives between $350 and $400  
            million in federal WIA dollars annually. 

            The California State WIB is charged with developing a unified,  
            strategic planning process to coordinate various education,  
            training, and employment programs into an integrated workforce  
            development system that supports economic development.  As  








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            such, the State WIB has adopted Sector Strategies as the  
            statewide framework for workforce development, and is working  
            closely with the Economic Strategy Panel, other State Agencies  
            and departments and its 49 local Workforce Investment Boards  
            to support the emergence of effective statewide and regionally  
            driven sector initiatives.

          2.  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, is  
            the first legislative reform of the public workforce system in  
            more than 15 years. WIOA supersedes the Workforce Investment  
            Act of 1998.  WIOA brings together, in strategic coordination,  
            the core programs of Federal investment in skill development,  
            including employment and training services for adults,  
            dislocated workers, youth and individuals with disabilities.  
            WIOA also authorizes programs for specific vulnerable  
            populations including Indian and Native Americans and migrant  
            and seasonal farmworker programs, among others. 

            The following are some highlights of the WIOA reforms: 
                 Strategically aligns investments in workforce  
               development programs to ensure that services provided are  
               coordinated and complementary to ensure job seekers acquire  
               skills and credentials that meet employers' needs. 
                 Promotes accountability and transparency by ensuring  
               that investments are evidence-based and data-driven, and  
               accountable to participants and tax-payers. 
                 Fosters regional collaboration to promote alignment of  
               programs with regional economic development strategies to  
               meet local needs. 
                 Improves quality and accessibility of services received  
               by job seekers and employers at their local job centers by,  
               among other things, establishing criteria for certification  
               of the centers that ensures continuous improvements.  
                 Improves services to employers and promotes work-based  
               training - matching employers with skilled individuals by  
               promoting the use of industry and sector partnerships. 
                 Promotes the use of Registered Apprenticeship programs  
               which has proven successful at providing workers with  
               career pathways and opportunities to earn while they learn.  

                 Streamlines and strengthens the roles of Workforce  








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               Development Boards - both state and local - to ensure  
               programs are coordinated, complementary and consistent  
               across the state. 

            The WIOA provisions take effect on July 1, 2015, the first  
            full program year after enactment. However, the WIOA state  
            unified and local plans and the WIOA performance  
            accountability provisions don't take effect until July 1,  
            2016. The U.S. Department of Labor will issue further guidance  
            on the timeframes for implementation of WIOA.

          3.  Need for this bill?

            The U.S. Department of Labor, in coordination with the U.S.  
            Departments of Education and Health and Human Services, are  
            working to ensure that states and local areas, other grantees,  
            and stakeholders are prepared for implementation of WIOA by  
            providing technical assistance, tools, and resources to its  
            website, webinars, and virtual and in-person discussions. The  
            U.S. Department of Labor has also recommended that state's  
            review their existing laws to identify areas that may conflict  
            with WIOA and develop plans and strategies to resolve these  
            conflicts.  When there are conflicts between state and federal  
            laws, federal law takes precedence. 

            Additionally, beyond complying with the new federal  
            requirements, WIOA offers states an opportunity to continue to  
            modernize the workforce system and create a customer-centered  
            system where 1) the needs of business and workers drive  
            solutions; 2) one-stop career centers provide excellent  
            customer service to jobseekers and businesses; and 3) the  
            workforce system supports strong regional economies. State and  
            local workforce boards - in partnership with workforce,  
            economic development, education, and social service  
            organizations at the state, regional and local levels are  
            encouraged to work together in this transition to achieve the  
            vision of WIOA. To this end, WIOA allows states and locals to  
            use up to two percent (2%) of the WIA's 2014 fiscal year  
            Youth, Adult and Dislocated Worker formula funds to transition  
            to WIOA. 

            SB 45 is one of two bills being sponsored by the California  
            Labor and Workforce Development Agency and the California  
            Workforce Investment Board that will make the necessary  








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            changes to existing law for the implementation of WIOA in our  
            State. Among other things, SB 45 would require the state, in  
            conformity with WIOA and after consultation with local boards  
            and chief elected officials, to identify planning regions and  
            require the locals to prepare regional workforce development  
            plans. 

          4.  Proponent Arguments  :
            
            According to the author, the recent recession left us with a  
            shattered job market and a record setting unemployment rate -  
            the toughest jobs crisis in over 50 years. Now more than ever,  
            it is crucial that every dollar of federal workforce funds  
            that our state receives is invested in high quality employment  
            services that connect workers with good paying jobs. The  
            recently passed WIOA is designed to help job seekers access  
            employment, education, training, and support services to  
            succeed in the labor market and to match employers with the  
            skilled workers they need to compete in the global economy. 

            The enactment of WIOA provides opportunity for reforms to  
            ensure that our state programs are responding to the needs of  
            employers and preparing workers for jobs that are available  
            now and in the future. Additionally, the new federal law  
            envisions more program coordination among the various  
            workforce development entities.  According to the author, this  
            bill is necessary to conform California law to the new federal  
            WIOA requirements. 

          5.  Opponent Arguments  :

            The California Right to Life Committee is concerned about the  
            mandated expansion of regionalizing the workforce as proposed  
            by SB 45. CRLC considers this development as one not in  
            keeping with a Constitutional Republic which provides for its  
            elected representatives at city, county, and state levels and  
            the marketplace to determine the future work needs of the  
            citizens and residents, not to have the prospect of federal  
            funds determine what are the employment needs locally.  

          6.  Prior and Related Legislation  :

            AB 1270 (Garcia) of 2015:  Pending referral in the Assembly 
            AB 1270 is the second bill sponsored by the CA Labor and  








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            Workforce Development Agency and the California Workforce  
            Investment Board that will make the necessary changes to  
            existing law for the implementation of WIOA. Specifically, AB  
            1270 would update statutory references to the Workforce  
            Investment Act of 1998 to instead refer to the Workforce  
            Innovation and Opportunity Act of 2014 and makes related  
            conforming changes. 

            SB 1401 (Lieu) of 2012: Held in Assembly Appropriations  
            Committee 
            SB 1401 would have required that the State WIB assist the  
            Governor in targeting resources to specified industry clusters  
            that provide economic security and leverage state and federal  
            funds to ensure that resources are invested in activities that  
            meet the needs of specified industry sectors and advance the  
            education and employment of students and workers so they can  
            meet the specified needs of the state, its regional economies,  
            and leading industry sectors.

            SB 698 (Lieu) of 2011: Chaptered
            SB 698 requires the Governor to establish, through the  
            California Workforce Investment Board, standards for  
            certification of high-performance local WIBs, in accordance  
            with specified criteria. The bill also requires the Governor  
            and the Legislature, in consultation with the California  
            Workforce Investment Board, to reserve specified federal  
            discretionary funds for high-performing local WIBs. 


          SUPPORT
          
          CA Labor and Workforce Development Agency (LWDA) - Sponsor 
          California Workforce Association (CWA) 
          

          OPPOSITION
          
          California Right to Life Committee, Inc. 

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