BILL ANALYSIS �
SB 912
Page 1
Date of Hearing: June 6, 2012
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
SB 912 (Lieu) - As Amended: January 4, 2012
SENATE VOTE : 25-10
SUBJECT : Employment Development Department (EDD): training
expenditure reports.
SUMMARY : Changes, among other things, the annual reporting
requirement by the EDD regarding training expenditures for job
training programs. Specifically, this bill :
1)Removes obsolete language giving the EDD the specific
authority to establish what expenditures qualify as training
expenditures.
2)Requires the EDD, beginning with the 2012 program year, to
report, within six months after the end of the two-year period
of availability for federal Workforce Investment Act (WIA)
funds, the training expenditures in the prior two program
years, instead of annually.
3)Specifies the report shall include the total amount of federal
funding provided for the adult and dislocated persons
programs, the amounts spent within each program for training
services and specify the amount of any leveraged funds
expended by the local workforce investment boards (LWIBs) for
training services, as defined in Unemployment Insurance Code
(UI Code) section 14211.
EXISTING LAW :
1)Establishes the federal Workforce Investment Act (WIA) of 1998
which provides for activities and programs for job training
and employment investment in which states may participate,
including work incentive and employment training outreach
programs.
2)Establishes the California Workforce Investment Board (CWIB)
and charges the CWIB with the responsibility of developing a
unified, strategic planning process to coordinate various
education, training, and employment programs into an
SB 912
Page 2
integrated workforce development system that supports economic
development.
3)Requires the Director of EDD to provide an annual report by
the end of November to the Governor, the Legislature and the
CWIB, regarding the training expenditures made by the local
workforce investment boards (LWIBs)
4)Imposes requirements related to the expenditure of Workforce
Investment Act (WIA) funds on job training programs. (UI Code
section 14211)
5)Gives EDD the authority to establish which expenditures
qualify as training expenditures.
FISCAL EFFECT : Unknown
RECENT RELATED LEGISLATION :
SB 698 (Lieu) Chapter 497 Statutes of 2011 requires the Governor
to establish, through the California Workforce Investment Board,
standards for certification of high-performance local WIBs, in
accordance with specified criteria. The bill also required the
Governor and the Legislature, in consultation with the
California Workforce Investment Board, to reserve specified
federal discretionary funds for high-performing local WIBs.
SB 734 (DeSaulnier) Chapter 498 Statutes of 2011 required local
WIBs to spend a certain percentage of available WIA funds (25%
now and increased to 30% in 2016) on workforce training programs
in a manner consistent with federal law and allows the boards to
leverage specified funds to meet this requirement. This bill
also required a local WIB that does not meet the expenditure to
provide the EDD with a corrective action plan regarding those
expenditures.
COMMENTS : The CWIB 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.
The majority of these funds (85 percent) are formula allocated
to the 49 Local Workforce Investment Boards (LWIBs) which set
the policy for how funds are invested locally and provide
oversight of employment services delivered. The rest of the
SB 912
Page 3
funds (15 percent) are distributed at the Governor's discretion.
LWIBs generally employ two types of programs to place
participants in jobs: job training programs and One-Stop
Centers. One-Stop Centers are primarily "work first" programs,
focusing primarily on finding immediate employment for their
participants by offering a variety of services including
training referrals, career counseling, and r�sum� workshops.
These programs have had some positive effect on placing people
in jobs; however, current research suggests that "work first"
programs are generally less effective than direct job training
programs in terms of benefits accrued to the long term
employability and salaries of their participants. A 2011 report
from the Senate Office of Research concluded that LWIBs
generally spend significantly less on job training programs than
they do running the One-Stop Centers and covering administrative
costs.
California's LWIBs receive federal WIA dollars in two-year
cycles of funding availability. However, these LWIBs must
report their expenditures on job training programs on an annual
basis. A portion of these WIA dollars are typically carried
forward from one fiscal year to the next, so statistical
analysis of the reports could present incomplete expenditure
figures. Therefore, this bill seeks a more accurate analysis of
how LWIBs are spending their training funds by gathering data
from the two-year program period of funding availability instead
of annually.
Since the amount of federal WIA funds to California have
declined, it is in the best interest of the state to spend this
money wisely and promote the LWIBs programs and services which
are most efficient and effective in helping California's
unemployed workforce find stable employment.
REGISTERED SUPPORT / OPPOSITION :
Support
California Labor Federation
State Building and Trades Council
SB 912
Page 4
Opposition
None on file.
Analysis Prepared by : Lorie Alvarez / L. & E. / (916)
319-2091