BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 698 (Lieu)
Hearing Date: 5/26/2011 Amended: 4/6/2011
Consultant: Bob Franzoia Policy Vote: L&IR 7-0
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BILL SUMMARY: SB 698 would require the Governor to establish,
through the California Workforce Investment Board (board),
standards for certification of high performance local workforce
investment boards (HPLWIB). This bill would require the
Governor to establish the High-Performance Workforce Investment
Board Fund (fund) and would require the board, in consultation
with the Governor to allocate federal discretionary funds to
HPLWIBs.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Establishment of high Potential annual redirection of funds
Federal
performance local workforce
investment boards
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STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
The Workforce Investment Act (WIA) was passed by Congress in
1998 and gives states and local governments the authority to
coordinate employment, training, literacy and vocational
rehabilitation programs. The Employment Development Department
distributes WIA funds to three categories of workers: adult,
youth, and dislocated workers.
The amount the state receives depends on the total amount of WIA
funds and the state's economic and demographic statistics as a
relative share of those statistics for all states. These funds
for California have declined over the years, from $630 million
in 2000-01 to about $497 million in 2009-10.
The local workforce investment boards (LWIBs) receive about 85
percent of the state's WIA allocation, while the remaining 15
percent of WIA funds are available for state discretionary
purposes. The formula allocation to LWIBs for 2009-10 was about
$422 million, while the amount of state discretionary funds is
about $75 million. The Legislature has prioritized a portion of
WIA discretionary funds for employment and training programs in
other areas such as veterans' training, nursing skills
initiatives, and green technology training.
SB 698 (Lieu)
Page 3
In addition to a base funding of $497 million, the American
Recovery and Reinvestment Act (ARRA) provided an additional $488
million for California's workforce system in 2009-10. Combining
the base and ARRA funds, the state has received a total of $985
million for workforce development programs. EDD has distributed
a total of $837 million to LWIBs and $148 million for state
discretionary programs ($282 million was allocated to youth
categories).
Under this bill, only HPLWIBs would qualify for receipt of the
15 percent discretionary funds, thus reducing or eliminating
funds received currently by LWIBs or local community groups.
Staff notes recent federal budget action reduced the 15 percent
discretionary fund to five percent and directed the ten percent
difference directly to LWIBs. As a result of that action, it
does not appear this bill can be implemented in its current
form.
As proposed to be amended, the bill would, beginning in
2013-2014, as part of the annual budget process, and in
consultation with the California Workforce Investment Board,
allocate a portion of the federal Workforce Investment Act's
15-percent discretionary fund for the purpose of providing
performance incentives to high-performance local workforce
investment boards. The amendments strike out the
High-Performance Workforce Investment Board Fund.