BILL ANALYSIS �
SB 912
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SENATE THIRD READING
SB 912 (Lieu)
As Amended January 4, 2012
Majority vote
SENATE VOTE :25-10
LABOR & EMPLOYMENT 6-0 APPROPRIATIONS 17-0
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|Ayes:|Swanson, Morrell, Alejo, |Ayes:|Gatto, Harkey, |
| |Furutani, Gorell, Yamada | |Blumenfield, Bradford, |
| | | |Charles Calderon, Campos, |
| | | |Davis, Donnelly, Fuentes, |
| | | |Hall, Hill, Cedillo, |
| | | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
| | | | |
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SUMMARY : Changes, among other things, the annual reporting
requirement by the Employment Development Department (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 :
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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
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 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 : According to the Assembly Appropriations
Committee, minor, absorbable costs to EDD to implement this
measure. Current law requires EDD to complete a similar report
regarding local CWIB expenditures. This bill repeals the
existing report and replaces it with the requirements in this
measure. If this bill is implemented, EDD's costs would likely
decrease because the bill requires the report to be conducted
according to WIA program year not annually.
COMMENTS : The CWIB is responsible for assisting the Governor in
the development, oversight, and continuous improvement of
California's workforce investment system. California receives
approximately between $400 and $500 million in federal WIA
dollars annually (LAO Report 2009/10). The majority of these
funds (85%) are formula allocated to the 49 LWIBs which set the
policy for how funds are invested locally and provide oversight
of employment services delivered. The rest of the funds (15%)
are distributed at the Governor's discretion.
LWIBs generally employ two types of programs to place
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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 a number of
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.
With the exception of American Recovery and Reinvestment Act
(ARRA), which put money into WIA, the overall funding has been
down over the years. Due to the decline of federal WIA funds to
California, 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.
Recent related legislation :
SB 698 (Lieu), Chapter 497, Statutes of 2011, requires the
Governor to establish, through the CWIB, standards for
certification of high-performance LWIBs, in accordance with
specified criteria. SB 698 also requires the Governor and the
Legislature, in consultation with the CWIB, to reserve specified
federal discretionary funds for high-performing LWIBs.
SB 734 (DeSaulnier), Chapter 498, Statutes of 2011, requires
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LWIBs 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. SB 734 also
requires a LWIB that does not meet the expenditure to provide
the EDD with a corrective action plan regarding those
expenditures.
Analysis Prepared by : Lorie Alvarez / L. & E. / (916)
319-2091
FN: 0004971