BILL ANALYSIS
AB 1804
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Date of Hearing: May 12, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1804 (Hagman) - As Amended: April 28, 2010
Policy Committee: InsuranceVote:11
- 1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill prohibits the Employment Training Fund (ETF) from
being used for employment training in the CalWORKs program and
instead requires that any money used for this purpose be
considered a loan to be paid back to the ETF within three years.
FISCAL EFFECT
Some ETF money has been used almost every year since the
inception of CalWORKs to provide employment training for
CalWORKs participants. Prohibiting the use of those funds for
that purpose would require an annual General Fund backfill in
CalWORKs ranging between $20 million and $60 million per year.
COMMENTS
1)Purpose . This bill is intended to prohibit the state from
using ETF funding for training CalWORKs recipients.
The bill's sponsor, the California Manufacturers and
Technology Association (CMTA), state that in recent years the
amount of money provided to the Employment Training Panel
(ETP) to fund their activities has diminished and significant
transfers of ETF monies to other activities has reduced the
ETP's ability to serve some segments of California businesses
and workers. They hope that this bill will redirect funding
away from employment training for CalWORKs recipients and to
the programs administered by the ETP.
2)Background . The California Employment Training Panel was
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designed to fund training that meets the needs of employers
for skilled workers and the needs of workers for good,
long-term jobs. The employer-supported program trains new
workers and retrains workers in danger of being laid off as a
result of technological advancements in the workplace, and
because of foreign and domestic competition. ETP has provided
over $850 million in training funds since its inception, with
close to 600,000 California workers trained. Funding for the
program comes from the ETF.
The ETF was created in the State Treasury for the deposit of
contributions from employers at the rate of 0.1% of the first
$7,000 of annual wages of each employee. Generally the fund
collects between $60 and $100 million per year from employers.
The money in the fund is used primarily for employment
training both through the CalWORKs program and a training
program administered by the ETP. Secondarily, the fund is used
to cover the costs of administering the ETF, pay the costs of
collecting the contributions from employers to finance the ETF
and financing the operation of the ETP.
The ETP annually identifies priority industries that are most
vital to California's economic growth. Employers in these
industries receive a higher reimbursement rate for training
programs funded by the ETF. This helps to concentrate the
expenditure of dollars in both growing industries and those
vital to the state's interests. The ETP has identified the
following industries as priority industries for next year:
manufacturing, green technology, nursing and allied
healthcare, construction, goods movement and transportation,
information technology services, biotechnology and life
sciences, multimedia/entertainment, and agriculture.
3)Opposition . The Service Employees International Union (SEIU)
states that the ETF is a funding source for both the ETP,
which provides training for existing employees, and the
CalWORKs Program, which helps unemployed poor people obtain
skills and training for employment. SEIU states that the
current law allowing the transfer of from the ETF to CalWORKs
provides flexibility to the Legislature and is necessary to
help the CalWORKs Program continue to successfully transition
unemployed people to work.
4)Prior Legislation . AB 816 (Hagman) of 2009, similar to this
bill, proposed to delete the statutory authority that
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specifies the Legislature may appropriate from the Employment
Training Fund an amount specified in the annual Budget Act to
fund the local assistance portion of welfare-to-work
activities under the CalWORKs Program. AB 816 failed passage
in the Assembly Insurance Committee.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081