BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 45| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 45 Author: Mendoza (D) Amended: 3/9/15 Vote: 21 SENATE LABOR & IND. REL. COMMITTEE: 5-0, 3/25/15 AYES: Mendoza, Stone, Jackson, Leno, Mitchell SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 SUBJECT: Workforce development: federal Workforce Innovation and Opportunity Act SOURCE: California Labor and Workforce Development Agency California Workforce Investment Board DIGEST: This bill is one of two being sponsored by the California Labor and Workforce Development Agency and the California Workforce Investment Board that will make the necessary changes to existing law for the implementation of the federal Workforce Innovation and Opportunity Act (WIOA) in our State. Among other things, this bill requires 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. ANALYSIS: SB 45 Page 2 Existing federal law: 1)The federal WIOA, signed into law on July 22, 2014, replaces the Workforce Investment Act of 1998 (WIA) and retains and amends the Adult Education and Family Literacy Act, the Wagner-Peyser Act, and the Rehabilitation Act of 1973. 2)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. Existing state law: 1)The WIA provided for activities and programs for job training and employment investment in which states could participate, including work incentive and employment training outreach programs. 2)Following passage of the federal WIA, the state established the California Workforce Investment Board (CWIB) and charged the CWIB 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. 3)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 LWIBs 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 Code §1400 et al) This bill makes necessary changes to existing workforce development statutes in California codes to conform to the new federal guidelines under the WIOA. Specifically, this bill: 1)Directs the CWIB to aid the Governor in facilitating system SB 45 Page 3 alignment across the core programs of the federal WIOA as well as other educational, social service, rehabilitation, and economic development agencies in the partnership. 2)After consultation with LWIBs and chief elected officials and in conformity with WIOA, requires that the state identify local planning regions. 3)Requires that the LWIBs and chief elected officials in each planning region engage in regional planning process that results in the following (among others): The establishment of regional service strategies, including the use of cooperative service delivery agreements; The development and implementation of sector initiatives for in-demand industries in the region; The coordination of services with regional economic development services and providers; and The collection and analysis of regional labor market data. 1)Requires the LWIBs and chief elected officials in each region prepare and submit for approval, a regional plan that includes description of the activities described above. 2)Lastly, this bill incorporates relevant WIOA definitions into California statutes. Background 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% of Adult and Youth formula funds, and 60% of Dislocated Worker formula funds are distributed to local WIBs. 15% 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 SB 45 Page 4 less than the 15% discretionary funds. California receives between $350 and $400 million in federal WIA dollars annually. The CWIB 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 such, the CWIB 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 LWIBs to support the emergence of effective statewide and regionally driven sector initiatives. Background on the Federal 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 WIA. 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 SB 45 Page 5 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 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. Prior and related legislation AB 1270 (Garcia, 2015)is the second bill sponsored by the California Labor and 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 updates statutory references to the WIA to instead refer to the Workforce Innovation and Opportunity Act of 2014 and makes related conforming changes. AB 1270 is pending in the Assembly. SB 118 (Lieu, Chapter 562, Statutes of 2013) required 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 the needs of the 21st century economy and promotes a well-educated and highly skilled workforce to meet the future workforce needs. SB 118 was a re-introduction of SB 1401 from 2012. SB 1401 (Lieu, 2012) would have required that the CWIB 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 SB 45 Page 6 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 1401 died in Assembly Appropriations Committee. SB 698 (Lieu, Chapter 497, Statutes of 2011) required the Governor to establish, through the CWIB, standards for certification of high-performance LWIBs, in accordance with specified criteria. The bill also required the Governor and the Legislature, in consultation with the CWIB, to reserve specified federal discretionary funds for high-performing LWIBs. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: Yes SUPPORT: (Verified4/15/15) California Labor and Workforce Development Agency (co-source) California Workforce Investment Board (co-source) California Workforce Association California Labor Federation OPPOSITION: (Verified4/15/15) California Right to Life Committee, Inc. ARGUMENTS IN SUPPORT: 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. SB 45 Page 7 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. ARGUMENTS IN OPPOSITION: 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. Prepared by:Alma Perez / L. & I.R. / (916) 651-1556 4/15/15 16:29:05 **** END ****