BILL NUMBER: SB 43 CHAPTERED 09/19/00 CHAPTER 491 FILED WITH SECRETARY OF STATE SEPTEMBER 19, 2000 APPROVED BY GOVERNOR SEPTEMBER 16, 2000 PASSED THE SENATE AUGUST 28, 2000 PASSED THE ASSEMBLY AUGUST 25, 2000 AMENDED IN ASSEMBLY AUGUST 23, 2000 AMENDED IN ASSEMBLY AUGUST 10, 2000 AMENDED IN ASSEMBLY SEPTEMBER 7, 1999 AMENDED IN ASSEMBLY AUGUST 16, 1999 AMENDED IN ASSEMBLY JULY 8, 1999 AMENDED IN ASSEMBLY JUNE 22, 1999 AMENDED IN SENATE MAY 11, 1999 AMENDED IN SENATE APRIL 6, 1999 AMENDED IN SENATE MARCH 18, 1999 INTRODUCED BY Senator Johnston (Principal coauthor: Senator Solis) DECEMBER 7, 1998 An act to amend Sections 10200, 10201, 10203, 10204, 10205, 10206, 10207, and 15037.1 of, to add Section 10202.5 to, to repeal and add Sections 10202 and 10214.5 of, and to repeal Sections 1611.6, 1612, 10206.5, 10212, 10212.1, 10214.6, 10218, and 10218.5 of, the Unemployment Insurance Code, relating to employment. LEGISLATIVE COUNSEL'S DIGEST SB 43, Johnston. Employment: training panel. Existing law provides for a special fund in the State Treasury known as the Employment Training Fund, to be expended for specified purposes relating to employment development. Provisions creating that fund are to be repealed on January 1, 2002. This bill would delete that termination date, thereby extending these provisions indefinitely. Existing law contains, subject to a January 1, 2002, repeal date, various programs for job training and employment investment. Among other things, existing law establishes an economic strategy panel and provides for work incentive programs, employment training, career opportunities, welfare-to-work programs, and family economic security. The employment training program contains provisions establishing employment training panels, and providing for local employment services. The bill would change the definition of an eligible participant in training programs, revise provisions determining the composition of the Employment Training Panel, delete provisions affecting contracting with minority- and women-owned businesses, authorize the panel to develop a process for local workforce investment boards to apply for marketing resources for employment training programs, eliminate the panel's advisory research council, eliminate the new hire cost reimbursement system, eliminate the requirement that the Bureau of State Audits review and evaluate the panel, reduce the funds available for allocation by the panel for funding special employment training projects, delete archaic provisions, make changes that conform to changes in federal law, and eliminate the January 1, 2002, repeal date. The bill would also make related technical and clarifying changes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1611.6 of the Unemployment Insurance Code is repealed. SEC. 3. Section 1612 of the Unemployment Insurance Code is repealed. SEC. 4. Section 10200 of the Unemployment Insurance Code is amended to read: 10200. The Legislature finds and declares the following: (a) California's economy is being challenged by competition from other states and overseas. In order to meet this challenge, California's employers, workers, labor organizations, and government need to invest in a skilled and productive workforce, and in developing the skills of frontline workers. For purposes of this section, "frontline worker" means a worker who directly produces or delivers goods or services. The purpose of this chapter is to establish a strategically designed employment training program to promote a healthy labor market in a growing, competitive economy that shall fund only projects that meet the following criteria: (1) Foster job creation of high-wage, high-skilled jobs, or foster retention of high-wage, high-skilled jobs in manufacturing and other industries that are threatened by out-of-state competition. Provide for retraining contracts in companies that make a monetary or in-kind contribution to the funded training enhancements. (2) Encourage industry-based investment in human resources development that promotes the competitiveness of California industry through productivity and product quality enhancements. (3) Result in secure jobs for those who successfully complete training. All training shall be customized to the specific requirements of one or more employers or a discrete industry and shall include general skills that trainees can use in the future. (4) Supplement, rather than displace, funds available through existing programs conducted by employers and government-funded training programs, such as the Workforce Investment Act of 1998, the Carl D. Perkins Vocational Education Act, CalWORKS, the Enterprise Zone Act, and the Stewart B. McKinney Homeless Assistance Act, or apportionment funds allocated to the community colleges, regional occupational centers and programs, or other local educational agencies. In addition, it is further the intention of the Legislature that programs developed pursuant to this chapter shall not replace, parallel, supplant, compete with, or duplicate in any way already existing approved apprenticeship programs. (b) The employment training panel, in funding projects that meet the requirements of subdivision (a), shall give funding priority to those projects that best meet the following goals: (1) Result in the growth of the California economy by stimulating exports from the state, and the production of goods and services that would otherwise be imported from outside the state. (2) Train new employees of firms locating or expanding in the state that provide high-skilled, high-wage jobs and are committed to an ongoing investment in the training of frontline workers. (3) Develop workers with skills that prepare them for the challenges of a high performance workplace of the future. (4) Train workers who have been displaced, have received notification of impending layoff, or are subject to displacement, because of a plant closure, workforce reduction, changes in technology, or significantly increasing levels of international and out-of-state competition. (5) Are jointly developed by business management and worker representatives. (6) Develop career ladders for workers. (7) Promote the retention and expansion of the state's manufacturing workforce. (c) The program established through this chapter is to be coordinated with all existing employment training programs and economic development programs, including, but not limited to, programs such as the Workforce Investment Act of 1998, the California Community Colleges, the regional occupational programs, vocational education programs, joint labor-management training programs, and related programs under the Employment Development Department and the Trade and Commerce Agency. SEC. 5. Section 10201 of the Unemployment Insurance Code is amended to read: 10201. As used in this chapter: (a) "Department" means the Employment Development Department. (b) "Employer" or "eligible employer" means any employer subject to Part 1 (commencing with Section 100) of Division 1, except any public entity, or any nonprofit organization which has elected an alternate method of financing its liability for unemployment insurance compensation benefits pursuant to Article 5 (commencing with Section 801), or Article 6 (commencing with Section 821) of Chapter 3. Any public entity or nonprofit organization that has elected an alternate method of financing its liability for unemployment insurance compensation benefits pursuant to Article 5 (commencing with Section 801), or Article 6 (commencing with Section 821) of Chapter 3, shall be deemed to be an employer only for purposes of placement of new hire trainees who received training as an incidental part of a training project designed to meet the needs of one or more private sector employers. (c) "Eligible participant" means any person who, prior to beginning training or employment pursuant to this chapter, is any of the following: (1) Unemployed and has established an unemployment insurance claim in this state, or has exhausted eligibility for unemployment insurance benefits from this state within the previous 24 months. (2) Employed for a minimum of 90 days by his or her employer, or if employed for less than 90 days, met the conditions of paragraph (1) at the time of hire, had received a notice of layoff from the prior employer, or was employed by an employer for a period of not less than 90 days during the 180-day period prior to the employee's current employment. (d) "Executive director" means the executive director appointed pursuant to Section 10202. (e) "Fund" means the Employment Training Fund created by Section 1610. (f) "Job" means employment on a basis customarily considered full time for the occupation and industry. The employment shall have definite career potential and a substantial likelihood of providing long-term job security. Furthermore, the employment shall provide earnings, upon completion of the employment requirement specified in subdivision (f) of Section 10209, equal to 50 percent, in the case of new hire training, or 60 percent, in the case of retraining, of the state or regional average hourly wage. However, in no case shall the employment result in earnings of less than 45 percent of the state average hourly wage for new hire training and 55 percent of the state average hourly wage for retraining. The panel may consider the dollar value of health benefits that are voluntarily paid for by an employer when computing earnings to meet the minimum wage requirements. (g) "New hire training" means employment training, including job-related literacy training, for persons who, at the start of training, are unemployed. (h) "Panel" means the Employment Training Panel created by Section 10202. (i) "Retraining" means employment related skill and literacy training for persons who are employed and who meet the definition of paragraph (2) of subdivision (c) prior to commencement of training and will continue to be employed by the same employer for at least 90 days following completion of training. (j) "State average hourly wage" means the average weekly wage paid by employers to employees covered by unemployment insurance, as reported to the Employment Development Department for the four calendar quarters ending June 30 of the preceding calendar year, divided by 40 hours. (k) "Trainee" means an eligible participant. (l) "Training agency" means any private training entity or local educational agency. SEC. 6. Section 10202 of the Unemployment Insurance Code is repealed. SEC. 7. Section 10202 is added to the Unemployment Insurance Code, to read: 10202. (a) The Employment Training Panel is established in the Employment Development Department. (b) The executive director shall be appointed by the Governor, and shall be well qualified for the position with experience in government. The executive director may perform all duties, exercise all powers, discharge all responsibilities, and administer and enforce all laws, rules, and regulations under the jurisdiction of the panel, with the approval of the panel. The executive director shall administer this chapter, with the approval of the panel, in the manner he or she deems necessary to conduct the work of the panel properly. With the approval of the panel, the executive director may create divisions and subdivisions as necessary, and change and abolish these divisions and subdivisions from time to time. (c) The panel may employ personnel necessary to carry out the purposes of this chapter. All personnel shall be appointed pursuant to the State Civil Service Act (Part 1 (commencing with Section 18000) of Division 5 of Title 2 of the Government Code), except for an executive director, and two assistant directors, who shall be exempt from state civil service. (d) All personnel of the panel shall be appointed, directed, and controlled only by the panel or its authorized deputies or agents to whom it may delegate its powers. (e) The Governor shall appoint two assistant directors, to serve at the pleasure of the Governor. The assistant directors shall have the duties as assigned by the executive director, and shall be responsible to the executive director for the performance of their duties. (f) One assistant director shall have experience in serving the needs of small businesses, and shall, under the supervision of the executive director, manage the panel's efforts to ensure that employment training services are available to small businesses. SEC. 8. Section 10202.5 is added to the Unemployment Insurance Code, to read: 10202.5. (a) The panel shall consist of eight persons, seven of whom shall be appointed as provided in subdivision (b), and shall have experience and a demonstrated interest in business management and employment relations. The Secretary of the Trade and Commerce Agency, or his or her designee, shall also serve on the panel as an ex officio, voting member. (b) (1) Two members of the panel shall be appointed by the Speaker of the Assembly. One of those members shall be a private sector labor representative and the other member shall be a business representative. (2) Two members of the panel shall be appointed by the President pro Tempore of the Senate. One of those members shall be a private sector labor representative and the other member shall be a business representative. (3) Three members of the panel shall be appointed by the Governor. One of those members shall be a private sector labor representative, one member shall be a business representative, and one member shall be a public member. (4) Labor appointments shall be made from nominations from state labor federations. Business appointments shall be made from nominations from state business organizations and business trade associations. (5) The Governor shall designate a member to chair the panel, and the person so designated shall serve as the chair of the panel at the pleasure of the Governor. (c) The appointive members of the panel shall serve for two-year terms, except that of the initial members of the panel, one initial appointee of each appointing power shall serve for a one-year term. (d) Appointive members of the panel shall receive the necessary traveling and other expenses incurred by them in the performance of their official duties out of appropriations made for the support of the panel. In addition, each appointive member of the panel shall receive one hundred dollars ($100) for each day attending meetings of the panel, and may receive one hundred dollars ($100) for each day spent conducting other official business of the panel, but not exceeding a maximum of three hundred dollars ($300) per month. SEC. 9. Section 10203 of the Unemployment Insurance Code is amended to read: 10203. The panel may meet as necessary at locations throughout the state. The panel shall maintain a minimum of three regional offices. The central office shall be located in Sacramento. Two regional offices shall be located in the southern part of the state, and one regional office shall be located in the northern part of the state. The executive director will assign one person, with experience in meeting the needs of small businesses, to each of the regional offices for the purpose of developing training projects for small businesses and expediting the processing of training proposals from small businesses. SEC. 10. Section 10204 of the Unemployment Insurance Code is amended to read: 10204. (a) The panel shall coordinate its programs with local and state partners of the federal Workforce Investment Act of 1998. This coordination shall include, but not be limited to, the adoption of a plan, including regular sharing of data, for the coordination of training authorized pursuant to this chapter with programs administered under Division 8 (commencing with Section 15000). (b) For purposes of serving the needs of small businesses, the panel may delegate its authority to approve contracts for new hire training to any entity defined in paragraphs (3) and (4) of subdivision (c) of Section 10205, provided the following conditions are met: (1) The panel determines that an entity to which it is delegating this authority meets the same standards as required of training agencies in Section 10210. (2) The panel delegates its authority pursuant to this section by a contract with the entity which limits the total amount of Employment Training Fund funds which are available to the entity, specifies a time limit within which those funds shall either be allocated or returned to the panel, specifies the reasonable administrative costs to be allowed in administering the contract, and provides that no subcontract approved by the entity shall exceed fifty thousand dollars ($50,000) per project without prior approval by the panel. (3) The subcontracts with employers and training agencies approved by the private industry council entity shall be for new hire training only and shall meet all the requirements of this chapter and the policies established by the panel. SEC. 11. Section 10205 of the Unemployment Insurance Code is amended to read: 10205. The panel shall do all of the following: (a) Establish a three-year plan that shall be updated annually, based on the demand of employers for trained workers, changes in the state's economy and labor markets, and continuous reviews of the effectiveness of panel training contracts. The initial three-year plan shall be submitted to the Governor and the Legislature not later than January 1, 1994. The initial update of the plan shall be submitted not later than July 1, 1994, and annual updates of the plan thereafter shall be submitted not later than July 1 of each year. In carrying out this section, the panel shall review information in the following areas: (1) Labor market information, including the state-local labor market information program in the Employment Development Department, and economic forecasts. (2) Evaluations of the effectiveness of training as measured by increased security of employment for workers and benefits to the California economy. (3) The demand for training by industry, type of training, and size of employer. (4) Changes in skills necessary to perform jobs, including changes in basic literacy skills. (5) Changes in the demographics of the labor force and the population entering the labor market. (6) Proposed expenditures by other agencies of federal Workforce Investment Act funds and other state and federal training and vocational education funds on eligible participants. (b) The panel shall maintain a system to continuously monitor economic and other data required under this plan. If this data changes significantly during the life of the plan, the plan shall be amended by the panel. Each plan shall include all of the following: (1) The panel's objectives with respect to the criteria and priorities specified in Section 10200 and the distribution of funds between new-hire training and retraining. (2) The identification of specific industries, production and quality control techniques, and regions of the state where employment training funds would most benefit the state's economy and plans to encourage training in these areas, including specific standards and a system for expedited review of proposals that meet the standards. (3) A system for expedited review of proposals that are substantially similar with respect to employer needs, training curriculum, duration of training, and costs of training, in order to encourage the development of proposals that meet the needs identified in paragraph (2). (4) The panel's goals and operational objectives with respect to meeting the needs of small employers. (5) The research objectives of the panel that contribute to the effectiveness of this chapter in benefiting the economy of the state as a whole. (6) A priority list of skills that are in such short supply that employers are choosing to not locate or expand their businesses in the state or are importing labor in response to these skills shortages. This list should identify those industries in which upgrade training is likely to encourage hiring of the unemployed on a backfill basis. (c) Solicit proposals and write contracts on the basis of proposals made directly to it. Contracts for the purpose of providing employment training may be written with any of the following: (1) An employer or group of employers. (2) A training agency. (3) A local workforce investment board with the approval of the appropriate local elected officials in the local workforce investment area. (4) A grant recipient or administrative entity selected pursuant to the federal Workforce Investment Act of 1998, with the approval of the local workforce investment board and the appropriate local elected officials. These contracts shall be in the form of fixed-fee performance contracts. Notwithstanding any provision of law to the contrary, contracts entered into pursuant to this chapter shall not be subject to competitive bidding procedures. Contracts for training may be written for a period not to exceed 24 months for the purpose of administration by the panel and the contracting employer or any group of employers acting jointly or any training agency for the purpose of providing employment training. (d) Fund training projects that best meet the priorities identified annually. In doing so, the panel shall seek to facilitate the employment of the maximum number of eligible participants. (e) Establish minimum standards for the consideration of proposals, which shall include, but not be limited to, the identification of employers who have been contacted by the contractor and who have provided reasonable assurance that they will employ successful trainees, the number of jobs available, the skill requirements for the identified jobs, the projected cost per person trained, hired, and retained in employment, the wages paid successful trainees upon placement, and the curriculum for the training. No proposal shall be considered or approved that proposes training for employment covered by a collective bargaining agreement unless the signatory labor organization agrees in writing. (f) Develop a process by which local workforce investment boards may apply for marketing resources for the purpose of identifying local employers that have training needs that reflect the priorities of the panel. The panel may delegate its authority to approve contracts for training to local workforce investment boards, provided that no contract approved exceeds $50,000 per project without prior approval of the panel and all contracts meet the provisions of this chapter and are consistent with the annual priorities identified by the panel. (g) Ensure the provision of adequate fiscal and accounting controls for, monitoring and auditing of, and other appropriate technical and administrative assistance to, projects funded by this chapter. (h) Provide for evaluation of projects funded by this chapter. The evaluations shall assess the effectiveness of training previously funded by the panel to improve job security and stability for workers, and benefit participating employers and the state's economy, and shall compare the wages of trainees in the 12-month period prior to training as well as the 12-month period subsequent to completion of training, as reflected in the department's unemployment insurance tax records. Individual project evaluations shall contain a summary description of the project, the number of persons entering training, the number of persons completing training, the number of persons employed at the end of the project, the number of persons still employed three months after the end of the project, the wages paid, the total costs of the project, and the total reimbursement received from the Employment Training Fund. (i) Report annually to the Legislature, by November 30, on projects operating during the previous state fiscal year. These annual reports shall provide separate summaries of all of the following: (1) Projects completed during the year, including their individual and aggregate performance and cost. (2) Projects not completed during the year, briefly describing each project and identifying approved contract amounts by contract and for this category as a whole, and identifying any projects in which funds are expected to be disencumbered. (3) Projects terminated prior to completion and the reasons for the termination. (4) A description of the amount, type, and effectiveness of literacy training funded by the panel. (5) Results of complete project evaluations. In addition, based upon its experience in administering job training projects, the panel shall include in these reports policy recommendations concerning the impact of job training and the panel's program on economic development, labor-management relations, employment security, and other related issues. (j) Conduct ongoing reviews of panel policies with the goal of developing an improved process for developing, funding, and implementing panel contracts as described in this chapter. (k) Expedite the processing of contracts for firms considering locating or expanding businesses in the state, as determined by the Trade and Commerce Agency, in accordance with the priorities for employment training programs set forth in paragraph (2) of subdivision (c) of Section 10200. (l) Coordinate and consult regularly with business groups and labor organizations, the California Workforce Investment Board, the State Department of Education, the office of the Chancellor of the California Community Colleges, the Employment Development Department, and the Trade and Commerce Agency. (m) Adopt by regulation procedures for the conduct of panel business, including the scheduling and conduct of meetings, the review of proposals, the disclosure of contacts between panel members and parties at interest concerning particular proposals, contracts or cases before the panel or its staff, the awarding of contracts, the administration of contracts, and the payment of amounts due to contractors. All decisions by the panel shall be made by resolution of the panel and any adverse decision shall include a statement of the reason for the decision. (n) Adopt regulations and procedures providing reasonable confidentiality for the proprietary information of employers seeking training funds from the panel if the public disclosure of that information would result in an unfair competitive disadvantage to the employer supplying the information. In no case shall the panel withhold information from the public regarding its operations, procedures, and decisions which would otherwise be subject to disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code). (o) Review and comment on the budget and performance of any program, project, or activity funded by the panel utilizing funds collected pursuant to Section 976.6. SEC. 12. Section 10206 of the Unemployment Insurance Code is amended to read: 10206. (a) The panel may allocate money in the fund for any of the following purposes: (1) Reimbursement of reasonable training costs, and administrative costs incurred by contractors. In making a determination of costs to be reimbursed under this paragraph, the panel may allocate funds in accordance with any of the following methods: (A) For purposes of providing simplified fixed-fee performance contracts, a flat rate per hour for categories of training that are substantially similar with respect to content, methodology, and duration, as determined by the panel, not to exceed the reasonable and normal costs for the training. The panel shall periodically adjust the standardized rates established pursuant to this paragraph to reflect changes in training costs. (B) A complete review of the proposal and its costs, including a budget listing the planned costs of training, including personnel, fringe benefits, equipment, supplies, fees for consulting or administrative services, and other costs attributable to training; the services provided by subcontractors; the length and complexity of the training; the method of training; the wages and occupations following training; whether the trainees are new hires or retrainees; and the cost of similar training that the panel has funded previously. The cost of administration shall not exceed 15 percent of the training costs under this paragraph, except that for new hire training the panel may fund administrative costs of up to 25 percent of the training cost. (C) The panel may modify the specific requirements of this paragraph as they apply to employers or contractors proposing projects that involve training for a significant number of small employers in the same project. (D) A contractor is prohibited from utilizing any funds earned or paid as advances or progress payments for the purpose of making payments to any other individual or entity, either directly or indirectly, for costs incurred as a finder's fee or for other compensation related to the predevelopment or development phase of a training program, which is based on a percentage of the preliminary or final panel award to the contractor for the training project. (2) (A) Costs of program administration incurred under this chapter. These costs shall be reviewed annually by the Department of Finance and the Legislature and determined through the normal budgetary process. (B) The panel's administrative costs, exclusive of the cost of administering Section 976.6, shall not exceed 15 percent of the total amount annually appropriated for expenditure by the panel. (C) Expenditures for marketing, research, and evaluations provided under the contract to the panel under paragraph (1) that otherwise would have been provided directly by the panel shall not be included in this limitation. (3) Service related to the purposes of this chapter provided by the Small Business Development Centers pursuant to an interagency agreement with the Trade and Commerce Agency. (b) For all training contracts, the panel shall establish requirements for in-kind contributions by either the contractor or the employer that reflect a substantial commitment on the part of the contractor or the employer to the value of the training. In developing these requirements, the panel shall take into account the ability of the contractor or the employer, because of size or financial condition, to make any contribution, and the ability of the Employment Training Fund to meet the demand for training authorized by this chapter. In developing policies regarding in-kind contributions, the panel shall hold public hearings. SEC. 13. Section 10206.5 of the Unemployment Insurance Code is repealed. SEC. 14. Section 10207 of the Unemployment Insurance Code is amended to read: 10207. (a) The panel shall accept or reject a completed application within 60 days of the receipt by the executive director. (b) The panel shall develop expedited procedures for reviewing proposals submitted by the state agencies which are participants in a special interagency agreement with the panel for purposes of this chapter. SEC. 15. Section 10212 of the Unemployment Insurance Code is repealed. SEC. 16. Section 10212.1 of the Unemployment Insurance Code is repealed. SEC. 17. Section 10214.5 of the Unemployment Insurance Code is repealed. SEC. 18. Section 10214.5 is added to the Unemployment Insurance Code, to read: 10214.5. (a) The panel may allocate up to 10 percent of the annually available training funds for the purpose of funding special employment training projects that improve the skills and employment security of frontline workers, as defined in subdivision (a) of Section 10200. (b) The panel shall, on an annual basis, identify industries and occupations that shall be priorities for funding under this section. Training shall be targeted to frontline workers who earn at least the state average weekly wage. (c) The panel may waive the minimum wage provisions pursuant to subdivision (f) of Section 10201 for projects in regions of the state where the unemployment rate is significantly higher than the state average, and may waive the employment retentions provisions specified in subdivision (f) of Section 10209 and instead require that the trainee has been retained in employment for a minimum of 90 days out of 120 consecutive days after the end of training with no more than three employers. (d) The panel shall adopt minimum standards for consideration of proposals to be funded pursuant to this section. (e) The panel may select contracts funded under this section based on competitive bidding. (f) It is the intent of the Legislature in providing the authority for these projects that the panel allocate these funds in a manner consistent with the objectives of this chapter as provided in Section 10200. SEC. 19. Section 10214.6 of the Unemployment Insurance Code is repealed. SEC. 20. Section 10218 of the Unemployment Insurance Code is repealed. SEC. 21. Section 10218.5 of the Unemployment Insurance Code is repealed. SEC. 22. Section 15037.1 of the Unemployment Insurance Code is amended to read: 15037.1. (a) The state council shall be responsible for developing an education and job training report card program to assess the accomplishments of California's workforce preparation system. (1) A subcommittee of the state council shall be established for this purpose. (2) The subcommittee shall be comprised of three private sector members of the state council, the director of the department, the Superintendent of Public Instruction, the Chancellor of the California Community Colleges, or their designees, and representatives of programs that are to be measured under the report card program. (3) The subcommittee shall be responsible for designing and implementing, or contracting with an operating entity for the implementation of, a system that can compile, maintain, and disseminate information on the performance of providers, programs, and the overall workforce preparation system. (b) By January 1, 2001, the subcommittee or an operating entity under contract to the subcommittee shall operate a comprehensive performance-based accountability system that matches the social security numbers of former participants in state education and training programs with information in files of state and federal agencies that maintain employment and educational records and identifies the occupations of those former participants whose social security numbers are found in employment records. (c) This system shall measure the performance of state and federally funded education and training programs for the purpose of system, program, and instructional improvement. Programs to be measured shall include programs in receipt of funds from the Job Training Partnership Act, the Carl D. Perkins Vocational Education Act, the Job Opportunities and Basic Skills program, the Food Stamp Employment and Training program, the Wagner Peyser Act, the Employment Training Panel, adult education programs as defined by paragraph (9) of subdivision (b) of Section 10521, basic vocational rehabilitation services as defined by Part B of Title 1 of the federal Vocational Rehabilitation Act of 1973, as amended (29 U.S.C. Sec. 701 et seq.), vocational education programs, and certificated community college programs. (d) Job training and education providers receiving funding identified in subdivision (c) shall, to the extent permitted by federal law, request social security numbers from each participant 18 years of age and over and not currently enrolled in high school and participating in a workforce preparation program and shall report to the subcommittee or an operating entity under contract to the subcommittee, as the case may be, on participant social security numbers and economic and demographic characteristics, including, but not limited to, age, gender, race or ethnicity, and education achievement. The state council shall establish the acceptable format and timeframes for data submission. (e) The system shall be designed to measure factors such as: (1) Amount and source of funding. (2) Program entrance and successful completion rates. (3) Employment and wage information for one and three years after completion of training. (4) The relationship of training to employment. (5) Academic achievement for one and three years after completion of training. (6) Achievement of industry skill standard certifications, where they exist. (7) Return on public investment. (f) Based upon the information compiled pursuant to this section, the subcommittee or an operating entity under contract to the subcommittee, as the case may be, shall, by December 31, 1997, and each December 31 thereafter, do all of the following: (1) Prepare and disseminate report cards for all training and education providers in receipt of funds included in the tracking system. (2) Prepare and disseminate local and statewide report cards that measure the outcomes of the individual programs that operate as part of the workforce development system. (3) Prepare and disseminate a state report card that measures the performance of the entire system of workforce preparation and the effectiveness of the system in meeting employers' needs for educated and trained workers and the clients' needs for improving their economic well-being. (g) The state council shall develop objective performance standards emphasizing the principles of continuous improvement for the programs covered under this section, and a system of sanctions and incentives to encourage performance that meet these standards. (h) The state council shall explore the feasibility of including the following persons in this system: (1) Attendees at private postsecondary institutions. (2) Recipients of federal student loans. (3) Recipients of Pell grants. (4) Pupils in grades 11 and 12. (5) Students enrolled in any community college, California State University, or University of California program. (i) The sole purpose of this section is to assess the performance of state and federal employment and training providers and programs in preparing Californians for the workforce. Collection and use of social security numbers pursuant to this section shall be consistent with the requirements of Section 7 of the federal Privacy Act of 1974 (P.L. 93-579) and Section 405(c)(2)(C) of Title 42 of the United States Code. Notwithstanding Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code, or any other provision of law, the social security number of any person obtained pursuant to this section is not a public record, and shall not be disclosed except for the purpose of this section. Information obtained pursuant to this section shall not be sold or distributed to any entity without prior consent from the individual, or his or her parent or guardian, with respect to whom the information is gathered. This subdivision does not prohibit the exchange of information with other governmental departments and agencies, both federal and state, that are concerned with the administration of workforce development programs. Neither the subcommittee nor an operating entity under contract to the subcommittee, as the case may be, may make public any information that could identify an individual or his or her employer. (j) An education and training program that requires information gathered by the education and job training report card program shall use the report card program and shall not initiate automated matching of records in duplication of methods already in place as a result of the report card program. (k) Funding for the development and maintenance of the education and job training report card program shall be made available on a shared basis by the programs the report card program is measuring, to the extent authorized by federal and state law. The subcommittee, or the operating entity under contract to the subcommittee, shall have the authority to assess each of the programs with an appropriate share of the costs of the report card program. Administrative funds currently used for program followup activities for the identified programs shall be redirected for this purpose, if authorized by federal law. (l) The state council shall apply for any federal waivers that may be necessary to implement this section.