BILL ANALYSIS �
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: April 13, 2011 20011-2012 Regular
Session
Consultant: Alma Perez Fiscal:Yes
Urgency: No
Bill No: SB 698
Author: Lieu
Version: As amended April 6, 2011
SUBJECT
Workforce development: high-performance boards
KEY ISSUE
Should the Legislature establish "high-performing" standards for
Local Workforce Investment Boards (Local WIBs) to meet in order
to be re-certified by the state every two years?
Should the Legislature specify that local WIBs that are not
adhering to the "high-performing" standards will not be eligible
to receive a portion of the states 15% discretionary funds?
PURPOSE
To establish standards for certification of high-performance
Local Workforce Investment Boards to ensure accountability and
consistency throughout the state's 49 local WIBs.
ANALYSIS
The federal Workforce Investment Act (WIA) of 1998 provides for
activities and programs for job training and employment
investment in which states may 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.
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.
Existing law further requires the Governor to certify one local
board for each local area in the state once every 2 years. This
certification is granted as long as the local WIB meets minimum
federal requirements for performance and board composition.
Under the 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 LWIBs
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 LWIBs. 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 Bill would require the Governor to establish, through the
California Workforce Investment Board, standards for
certification of high-performance Local Workforce Investment
Boards in accordance with specified criteria.
Specifically, this bill would:
� Direct the CWIB, in consultation with representatives
from local WIBs, to initiate a stakeholder process to
determine the appropriate standards for high-performance
certification, to occur once every two years.
� Require that the standards be implemented on or before
January 1, 2012, with the first certification of
high-performance boards to occur on or before January 1,
Hearing Date: April 13, 2011 SB 698
Consultant: Alma Perez Page 2
Senate Committee on Labor and Industrial Relations
2013.
� Provide that in order to meet the standards for
certification a local board shall, among other things, do
the following:
o Meet or exceed negotiated performance goals,
as specified;
o Develop and implement local policies and a
local strategic plan that, among other things, is
separate from the local plan required under the
federal WIA and is consistent with the CWIB strategic
plan.
o Demonstrate that the local planning process
involves key stakeholders, including the major
employers and industry groups in the relevant regional
economy and organized labor.
o Demonstrate that the local planning process
considers the entire workforce training pipeline,
including partners in K-12 education, career technical
education, the community college system and other
postsecondary institutions.
o Demonstrate investment in initiatives and
training programs that promote skills development and
career ladders relevant to the needs of each workforce
area.
o Establish a business service plan that
integrates local business involvement with workforce
initiatives. The plan shall include, among other
things, efforts to partner with business to identify
training and educational barriers to attract jobs,
existing skills gaps and potential emerging
industries. In addition, the plan shall include an
electronic system for both business and job seekers to
communicate about job opportunities.
� Require the Governor to establish the High-Performance
Workforce Investment Board Fund and require the CWIB, in
consultation with the Governor, to allocate a portion of
the federal WIAs 15% discretionary fund to this fund.
o Only a certified high-performance board shall
be eligible to receive money from the High-Performance
Workforce Investment Board Fund or any portion of the
state's 15% discretionary fund.
Hearing Date: April 13, 2011 SB 698
Consultant: Alma Perez Page 3
Senate Committee on Labor and Industrial Relations
COMMENTS
1. Need for this bill?
The California Workforce Investment Board is responsible for
assisting the Governor in the development, oversight, and
continuous improvement of California's workforce investment
system. California receives between $400 and $500 million in
federal WIA dollars annually. And in 2008/09, the state
received an additional $488.6 million from the American
Recovery and Reinvestment Act of 2009. The majority of these
funds (85%) are formula allocated to the 49 local WIBs which
set policy for how funds are invested locally and provide
oversight of employment services delivered. The rest of the
funds (15%) are disseminated at the Governor's discretion.
California's 49 local WIBs set local policies and allocate
resources to respond to local markets to help struggling
unemployed and underemployed workers get and retain good jobs.
Currently, local WIBs are certified by the Governor every two
years, but this certification process merely requires them to
meet minimum federal requirements. Although many local WIBs
provide high quality services, the system does not adhere to
any coherent state standards, leaving workers and businesses
to face widely varying levels of quality and effectiveness
across the state's 49 local WIB jurisdictions.
This bill would require the Governor to establish, through the
CWIB, standards for certification of high-performance local
WIBs, in accordance with specified criteria. In addition,
this bill would also require the Governor to establish the
High-Performance Workforce Investment Board Fund and would
require the CWIB, in consultation with the Governor, to
allocate specified federal discretionary funds to
high-performance local workforce investment boards.
2. Similar efforts in other states :
Hearing Date: April 13, 2011 SB 698
Consultant: Alma Perez Page 4
Senate Committee on Labor and Industrial Relations
Federal law provides states significant latitude to adjust WIA
and align it with a broader economic vision. This allows
Governors the opportunity to hold local WIBs accountable to
additional performance requirements and statewide standards
consistent with building a high performing and integrated
workforce development system. Several States have addressed
the need to hold local WIBs to higher standards through a
process of a second-tier certification process delineating
high-performance WIBs. Those states that have implemented, or
are in the process of implementing, this certification process
includes Kentucky, Missouri, North Carolina, South Carolina,
Michigan, and Pennsylvania.
3. Proponent Arguments :
According to the author, workers in California are
experiencing a recession like never before that has left us
with a shattered job market and a record setting unemployment
rate. Nonetheless, proponents argue that employers will soon
need a skilled workforce to replace the retiring baby boomer
generation and meet the demands of new emerging industries.
According to the author and proponents, 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 to good paying jobs.
According to proponents, federal law provides Governors the
authority to certify local WIBs every two years, however, this
certification must be granted as long as local WIBs meet
minimum federal requirements for performance and board
composition. Proponents argue that federal performance
measures are largely inadequate for ensuring that local WIA
dollars provide quality service that lead workers to good
jobs. In addition, proponents argue that the performance of
California's local WIBs has been inconsistent throughout the
state and lacks a unified goal.
Proponent believe that this bill will raise the bar statewide
for performance and quality outcomes for California's
federally funded workforce investment system by outlining a
high performance standard that the local WIBs can strive for
in order to be eligible for additional funding. In addition,
proponents argue that it is essential that there be a direct
Hearing Date: April 13, 2011 SB 698
Consultant: Alma Perez Page 5
Senate Committee on Labor and Industrial Relations
correlation between the training workers receive and the jobs
available. According to proponents, this bill will create an
incentive by which local WIBs can strive to meet a high
performance standard which meets federal performance criteria,
develops stronger local workforce initiatives, and establishes
a business service plan that together can create a unified
goal to provide quality services that connect workers to good
paying jobs.
4. Opponent Arguments :
None received.
SUPPORT
California Labor Federation - Co-Sponsor
California Manufacturers & Technology Association - Co-Sponsor
State Building and Constructions Trades Council - Co-Sponsor
OPPOSITION
None received
Hearing Date: April 13, 2011 SB 698
Consultant: Alma Perez Page 6
Senate Committee on Labor and Industrial Relations