BILL ANALYSIS
AB 2004
Page 1
Date of Hearing: April 13, 2010
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Jim Beall Jr., Chair
AB 2004 (Beall) - As Amended: April 5, 2010
SUBJECT : Job creation: work incentive, and work subsidy
programs
SUMMARY : Encourages job growth for low-income persons by
creating a supplemental structure for counties with few
resources or technical expertise to receive assistance with
establishing a subsidized employment program. Specifically,
this bill :
1)Creates the California Civic Works Act of 2010 and declares,
among other things, that it is the intent of the Legislature
to enact legislation to allow local jurisdictions to create
their own unique solutions, as needed, to respond to the
economic crisis with which California is currently struggling.
2)Requires the Department of Social Services (DSS) to issue one
or more all-county letters or similar instructions from the
director to clarify eligibility criteria and provide a
framework for wage subsidy programs funded pursuant to the
federal Emergency Contingency Fund (ECF) for State Temporary
Assistance for Needy Families Programs; and further specifies
that the all-county letters or instructions required under
this section shall include examples of successful programs
being operated by counties, and also shall address all of the
following:
a) A plan to relax procurement guidelines to allow counties
to enter into sole-source contract agreements that meet
federal procurement standards;
b) A requirement to allow a county to receive emergency
contingency funding 60 days before providing local matching
funds, in order to cover the initial cost of developing a
wage subsidy program;
c) Incentives and guidance to encourage counties to operate
summer youth programs;
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d) Technical assistance for counties with high unemployment
rates, that lack the necessary infrastructure to implement
a wage subsidy program on their own;
e) Encouragement of multicounty and regional alignments and
joint powers authorities, using economies of scale;
f) Allowing local services agencies, workforce investment
boards, and wage subsidy partners to be reimbursed for
their costs of doing business for providing technical
assistance to counties;
g) Incentives for participation by nonprofit and public
sector organizations;
h) Encouragement of a tiered wage subsidy rate structure
under which nonprofit and public organizations would
receive a 100% wage subsidy and private employers would
receive an 80% wage subsidy;
i) Development and support of new and existing
apprenticeship and preapprenticeship programs, using
emergency contingency funds;
j) Encouragement and guidance to encourage counties to
create various types of civic works jobs and to build
public infrastructure projects;
aa) Any other provision DSS deems appropriate to facilitate
the establishment or operation of a work incentive or wage
subsidy program in accordance with this section;
3)States that income derived from participation by an adult
CalWORKs recipient in a wage subsidy program shall not be
considered income for purposes of CalWORKs eligibility.
4)Specifies that if a county is already operating a wage subsidy
program on the date that the act adding this section is
enacted, operation of that program shall not limit or
otherwise restrict the county's eligibility to receive funding
for a program operated in accordance with this section.
5)Requires DSS to provide the Legislature with statistical
information, including, but not limited to, county
participation, number of jobs, type of employers, and quality
AB 2004
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of employment, by also submitting all federally mandated
progress reports to the Senate and Assembly Human Services
Committees, for their review and comment.
EXISTING LAW
1) Establishes, under federal law, the Temporary Assistance
for Needy Families (TANF) program which provides cash
assistance and supportive services for low-income families
to achieve self-sufficiency through employment.
2) Provides, under federal law, emergency funding for
states to use for three purposes: basic assistance,
subsidized work, and short-term non-recurring costs.
American Recovery and Reinvestment Act of 2009 (Public Law
111-5)
FISCAL EFFECT : Unknown
COMMENTS : The author states that a s California and the nation
continue to crawl out of one of the worst recessions on record,
California's unemployment rate remains perilously high at nearly
13 % . Over two million Californians are currently unemployed,
and many more millions are under-employed. To address
California's high unemployment, the L egislature passed several
bills focused on stimulating our economy and job creation.
The author further states that r ight now, the Department of
Social Services (DSS) has millions of dollars in federal
stimulus funds available to jump start local wage subsidy
programs - programs that encourage employers to hire the
unemployed by subsidizing the salaries of those workers.
However, he points out that unf ortunately, not all Californians
are benefiting from this program. Many smaller counties, and
those with high unemployment rates, simply are unable to meet
the administrative requirements due to a lack of money or the
technical expertise to start up the programs. As of April ,
forty-one of the fifty-eight California counties were operating
TANF ECF work subsidy programs.
If passed, the author believes that AB 2004 will get more
Californians back to work by addressing the biggest
implementation barriers that are preventing some counties from
developing employment subsidy programs.
AB 2004
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ARRA TANF emergency funding
As part of the American Recovery and Reinvestment Act (ARRA) of
2009, the federal government created the TANF Emergency
Contingency Fund ( TANF ECF) to assist states with rising TANF
caseloads and diminishing state revenues . The TANF ECF can be
used for three types of expenditures: Basic Assistance (cash
grants), Subsidized Employment, and Non-Recurrent Short-Term
Benefits. The ARRA statute does not require any specific
breakdown of these uses. Most of the money drawn down so far
has been for basic assistance ($911 million nationally) and
non-recurrent benefits ($817 million nationally) versus
subsidized employment ($316 million nationally). All of these
expenditures require a 20% state match to draw down 80% federal
funding. For subsidized employment, the match can be in-kind.
The TANF ECF is set to expire on September 30, 2010. It may be
extended for six or 12 months but an act of Congress is required
to do this. Thus far, the issue has been gaining traction but
the two houses have not agreed on a bill for this extension or
on the structure such an extension would take. Many advocacy
organizations are working for an extension of TANF ECF for 12
months under the current structure, provision of at least an
additional $2.5 billion for states to draw down, and rollover
authority for existing funds so that subsidized employment slots
created and filled during FFY 2010 would be able to be funded
using currently appropriated funds, rather than the new $2.5
billion pot.
According to the author, a s of January 2 010 twenty-two states
have been authorized to use TANF ECF dollars. California's
initial allocation was $441.3 million.
Current county subsidized employment program
The County Welfare Directors' Association (CWDA) indicates that
by the end of the last quarter (January through March 2010),
California expected 41 counties to have created 16,300 slots for
subsidized employment and to have drawn down $100 million for
these slots. These slots generally last about six months, or
can be shorter or longer depending on the agreement between the
county and the local employer. CWDA adds that California is
well ahead of the rest of the country in drawing down funds for
subsidized employment. The most recent federal statistics show
that California is spending about one-third of national
subsidized employment funds.
AB 2004
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Strengthening the bill
AB 2004 seeks to bolster the state and counties' already
existing efforts to create subsidized employment programs and
jobs across California counties using federal stimulus money.
With 17 counties still without a subsidized employment program,
it appears that this bill may encourage those counties to take
advantage of the assistance provided in this bill. However, AB
2004 needs several amendments to focus its goal and make it more
complimentary to existing county efforts. The author has agreed
to accept the following amendments:
1)Delete the following provisions:
a) A plan to relax procurement guidelines to allow counties
to enter into sole-source contract agreements that meet
federal procurement standards.
b) Incentives for participation by nonprofit and public
sector organizations.
c) Encouragement of a tiered wage subsidy rate structure
under which nonprofit and public organizations would
receive a 100% wage subsidy and private employers would
receive an 80%t wage subsidy.
d) Income derived from participation by an adult CalWORKs
recipient in a wage subsidy program shall not be considered
income for purposes of CalWORKs eligibility.
1)Clarify the following language:
a) A requirement to allow a county to receive emergency
contingency funding 60 days before providing local matching
funds, in order to cover the initial cost of planning and
developing a wage subsidy program.
b) Incentives and guidance to encourage counties to operate
summer youth employment programs including summer programs .
c) Technical assistance for counties with high unemployment
rates, that lack the necessary infrastructure , including
available employers, to plan and implement a wage subsidy
program on their own.
d) Encouragement of multicounty and regional alignments and
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joint powers authorities , using economies of scale.
e) Development and support of new and existing
apprenticeship and preapprenticeship programs, using
emergency contingency funds to the extent federally
allowable .
f) Encouragement and guidance to encourage counties to
create various types of civic works jobs and to build
public infrastructure projects . and incentives for
participation by nonprofit and public sector organizations
in those programs.
g) Nothing in this section is intended to require changes
to existing county subsidized employment programs. If a
county is already operating a wage subsidy program on the
date that the act adding this section is enacted, operation
of that program shall not limit or otherwise restrict the
county's eligibility to receive funding for a program
operated in accordance with this section.
h) The department shall provide the Legislature with
statistical information, including, but not limited to,
county participation, number of jobs, type of employers,
and quality of employment, by also submit ting all federally
mandated progress reports to the Senate and Assembly Human
Services Committees in a timely manner , for their review
and comment.
1)Add the following language to target the bill to those
counties that have the highest unemployment rates or do not
operate a subsidized employment program; specify the types of
public works projects, and require that apprenticeship and
preapprenticeship programs be a part of the DSS guidance:
a) Furthermore, in the event of a federal extension of the
TANF ECF program, the department shall, with in four weeks,
be ready to launch a civic works employment subsidy program
in at least five counties including but not limited to
those counties with the highest unemployment rates and/or
counties that do not operate a subsidy program due to a
lack of participating employers or other barriers. The
department shall work collaboratively with the counties to
identify local and state infrastructure projects that can
be completed by individuals participating in a TANF ECF
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wage subsidy program.
b) The Civic Works projects may include:
i) Building or improving infrastructure (schools,
roads, hospitals, parks, etc.);
ii) Energy efficiency, alternative energy and
environmental restoration projects;
iii) Supporting social services in areas such as elderly
and health care;
iv) Workforce development to the extent that it is
federally allowable;
v) Conservation corps of young adults, with a
particular emphasis on environmental and energy projects;
and
vi) Summer and after school employment or skills
training opportunities for youth between the ages of
12-19 years old.
c) The organizations conducting the work may include the
City/County Department of Public Works, contractors, and
non-profits.
d) The department shall engage counties interested in
developing a part time pre-apprenticeship or apprenticeship
program for participants already enrolled in at least 20
hours of work subsidy program and provide guidance and
flexibility to the extent it is federally allowable to
operate such a program.
2)Add an urgency clause:
The fact that the current authorization for ARRA TANF ECF
funding is set to expire on September 30, 2010 and potential
extensions to expire up to a year after that, AB 2004 needs to
take effect immediately in order for counties to have time to
access the assistance.
REGISTERED SUPPORT / OPPOSITION :
AB 2004
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Support
None on file.
Opposition
None on file.
Analysis Prepared by : Frances Chacon / HUM. S. / (916)
319-2089