BILL ANALYSIS �
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THIRD READING
Bill No: SB 1401
Author: Lieu (D)
Amended: 4/18/12
Vote: 21
SENATE LABOR & INDUST. RELATIONS COMM. : 5-0, 4/25/12
AYES: Lieu, Wyland, DeSaulnier, Leno, Yee
NO VOTE RECORDED: Padilla, Runner
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Unemployment insurance: education and
workforce investment systems
SOURCE : Author
DIGEST : This bill provides that the California Workforce
Investment Board (CWIB) is responsible for assisting the
Governor in aligning the education and workforce investment
systems to the needs of the 21st century economy and
workforce as well as promoting and developing a
well-educated and highly skilled workforce to meet those
needs. This bill requires, as part of the CWIB strategic
workforce plan, the creation of a California Industry
Sector Initiative that will accomplish specified tasks,
including aligning and leveraging federal, state, and local
Workforce Investment Act (WIA) funding streams, identifying
specified industry sectors and clusters, providing
skills-gap analysis, and establishing specified eligibility
criteria for the WIA eligible training provider list
CONTINUED
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(ETPL).
ANALYSIS : The federal WIA of 1998 provides funding 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 CWIB and charged 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. There are 49 local
Workforce Investment Boards (local WIBs) that plan and
oversee the workforce investment system at the local level.
Each local WIB also has one or more One-Stop Centers,
which provide access to career information, counseling,
funding for education, training and supportive services.
Existing law requires the CWIB, in collaboration with
specified state and local partners, and the local WIBs to
develop a strategic workforce plan, updated at least every
five years, to address the state's economic, demographic,
and workplace needs.
Among its other responsibilities, the CWIB develops
protocols to ensure that policies are developed with full
public input and discussion. The CWIB is also responsible
for establishing criteria for development of (1) the
formulae to be used for allocating funds to the local
areas, (2) dissemination of the Governor's 15% WIA
discretionary funding, and (3) certification and
re-certification of local WIBs. The CWIB also provides
recommendations to the Governor on policy and vision for
the statewide employment statistics system.
This bill provides that the CWIB is responsible for
assisting the Governor in aligning the education and
workforce investment systems to the needs of the 21st
century economy and workforce as well as promoting and
developing a well-educated and highly skilled workforce to
meet those needs.
Specifically, this bill establishes six principles to guide
the state's workforce investment system that include:
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1. Programs and services must be responsive to the needs of
employers, workers, and students by:
A. preparing students and workers with the skills
necessary to successfully compete in the global
economy;
B. producing greater number of workers with
industry-recognized certificates and degrees in
competitive and emerging industries to fill labor
market skills gaps;
C. adapting to local and regional labor market
changes;
D. preparing workers for good-paying jobs that foster
economic security and upward mobility.
2. CWIB and local WIBs are encouraged to collaborate with
other public and private institutions (including
businesses, career technical and adult education
programs, and community college programs, among others)
to adopt local and regional training and education
strategies that better align resources across education
and training service delivery systems and build a
well-articulated workforce investment system, as
specified.
3. Workforce investment programs and services shall be data
driven and evidence based when setting priorities,
investing resources, and adopting practices.
4. Workforce investment programs and services shall develop
strong partnerships with the private sector, ensuring
industry involvement in needs assessment, planning, and
program evaluation.
5. Workforce investment programs and services shall be
outcome oriented and accountable, measuring results
through outcomes related to program completion,
employment, and earnings.
6. Programs and services shall be accessible to employers,
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workers, and students who may benefit from their
operation, including individuals with employment
barriers, such as persons with economic, physical, or
other barriers to employment.
Additionally, this bill also directs the CWIB to, among
other things:
1. Target resources towards high-wage competitive and
emerging industry sectors that have a significant
economic impact on the state, have immediate education
and workforce development needs, and have documented
career opportunities.
2. As part of its strategic workforce plan, create a
California Industry Sector Initiative to provide a
framework for state workforce investments and support
for sector strategies.
3. By considering the expertise of local WIBs, annually
identify industry sectors with a competitive economic
advantage and annually conduct skills-gap analyses
enumerating occupational and skills shortages in the
industries identified as having strategic importance to
the state.
4. Establish, with input from local WIBs and other
stakeholders, initial and subsequent eligibility
criteria for the WIA ETPL that effectively directs
training resources into training programs leading to
employment in high-demand, high-priority, and high-wage
occupations, as specified.
5. Provide definitions for specific terms used in this
bill, including, "career pathways," "sector strategies,"
"industry sectors" and "economic security," among
others.
Comments
Background on the CWIB
Under federal law, WIA funds are distributed to the states
based on formulas that consider unemployment rates and
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other economic and demographic factors. California and its
49 Local WIBs receive WIA formula funding from the United
States Department of Labor through three revenue streams -
Adult, Youth, and Dislocated Workers. Under federal law,
85% of Adult and Youth formula funds, and 60% of Dislocated
Worker formula funds are distributed to local WIBs. 15% of
Adult, Youth, and Dislocated Worker formula funds (15%
discretionary funds) are allocated to the state for a
variety of discretionary uses.
The CWIB is charged with developing a unified, strategic
planning process to coordinate various education, training,
and employment programs into an integrated workforce
development system that supports economic development. As
such, the CWIB has adopted Sector Strategies as the
statewide framework for workforce development, and is
working closely with the Economic Strategy Panel, other
state agencies and departments and its 49 local WIBs to
support the emergence of effective statewide and regionally
driven sector initiatives.
All members of the CWIB are appointed by the Governor and
represent the many facets of workforce development -
business, labor, public education, higher education,
economic development, youth activities, employment and
training, as well as the Legislature. Through its broad
membership, the CWIB encourages collaboration among both
state and local public and private entities. This
collaboration is further enhanced through its committee
structure. The CWIB engages state and local partners
through its Special Committees which address four policy
priorities outlined in the CWIB's Strategic Plan. The
Special Committees include the Green Collar Jobs Council,
the Special Committee on Issues and Policies, the State
Youth Vision Team, and the Health Workforce Development
Council.
Background on the ETPL
California's ETPL was established in compliance with the
WIA. The purpose of the ETPL is to provide
customer-focused employment training for adults and
dislocated workers. Training providers who are eligible to
receive Individual Training Accounts through WIA Title I-B
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funds are listed on the ETPL. California's statewide list
of qualified training providers offers a wide range of
educational programs, including classroom, correspondence,
Internet, broadcast, and apprenticeship programs.
Existing law requires the establishment of two separate
procedures for the ETPL: initial eligibility and
subsequent eligibility. California has been granted a
waiver of the requirement for subsequent eligibility
specified in WIA Section 122(c)(5) and Title 20 of the Code
of Federal Regulations Section 663.530. This current
federal waiver allows providers and programs to remain on
the state ETPL indefinitely as long as their initial
eligibility is still valid.
According to an Employment Development Department (EDD)
information notice to the workforce development community,
it was notated that the current ETPL contained more than
5,000 program/providers that never had a WIA client
referred to them, nor had the programs been validated for
at least two years. In an effort to meet the terms of the
waiver pertaining to subsequent eligibility, the Workforce
Services Division had to deactivate all existing ETPL
programs that were more than two years old (i.e. initial
approval date prior to January 1, 2010) and did not have a
single WIA client referred to them during their tenure on
the ETPL. (WSIN11-45, March 27, 2012). However, if the
local WIB determines that an unused program/provider should
be reactivated and remain on the ETPL, a verification must
be done at the local level to ensure that the data on the
inactive ETPL is valid and that this program/provider is a
not a duplication of an existing program/provider on the
ETPL.
California State Auditor Report on Federal Workforce
Investment Act
A March 2012 report, "Federal Workforce Investment Act:
More Effective State Planning and Oversight Is Necessary to
Better Help California's Job Seekers Find Employment,"
evaluated the state's administration of WIA funding.
Among its finding, the audit revealed that:
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More than five years after state law required the CWIB
to develop a strategic workforce plan to serve as a
framework for public policy, fiscal investment, and
state labor programs to address workforce needs; it has
failed to do so and thus, has not provided sufficient
guidance to its workforce development partners.
Both EDD and the CWIB can do more to assess the quality
of services - neither has a mechanism to evaluate
whether an appropriate match exists between a
participant's skills, education, and experience and the
employment the participant attains.
Although the CWIB is building partnerships with various
entities to coordinate workforce investment planning, it
has done little to ensure that the one-stop delivery
system does not duplicate services for program
participants.
The State Auditor made several recommendations in the
report, including one that the Legislature consider
establishing a due date for the CWIB to develop a strategic
workforce plan, and clarify the roles and responsibilities
of the state board and EDD. According to the Auditor,
without this plan, we cannot ensure that our workforce
investment system provides life-long learning, promotes
self-sufficiency, links education and training to economic
development, and prepares California to compete
successfully in the global economy as the Legislature
intended. The Auditor also made recommendations to the
CWIB aimed at developing, overseeing, and continuously
improving California's workforce investment system by
collaborating with state and local workforce partners and
clearly defining terminology and identifying state-specific
performance measures.
According to the report, the Labor Agency, the CWIB, and
EDD agreed with the recommendations. The CWIB is currently
working on the strategic workforce plan and intends to have
it finalized by this summer.
Sector Strategies
According to the Senate Labor and Industrial Relations
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Committee analysis, there is broad consensus that better
educated and trained workers are more productive and more
successful in labor markets. However, targeting these
efforts towards the jobs sectors that are best positioned
to make gains if investments are made is essential and
requires the use of current economic and labor market data
to determine what those sectors are. "Sector strategies"
are policy initiatives designed to promote the economic
growth and development of a state's competitive industries
using strategic workforce investments to boost labor
productivity. The strategic focus of sectors is on
prioritizing investments where overall economic returns are
likely to be highest, specifically in those sectors that
will generate significant gains in terms of jobs and income
or in industries facing a shortage of skilled workers.
When done successfully, sector strategies can lead to
mutually beneficial outcomes for business, labor, and the
state by increasing competitiveness and growth, improving
worker employability and income, and reducing the need for
social services while also bolstering government revenues
generated by both business and workers. According to a
2010 study of three sector focused training programs in
Wisconsin, Massachusetts, and New York, it was found that
participants in the relevant training programs earned more
and were employed at higher rates than were members of the
study's control group. (Tuning Into Local Labor Markets:
Findings from the Sectoral Employment Impact Study,
Public/Private Ventures, 2010)
Sector strategies have been adopted in several states,
including Pennsylvania, Michigan, Washington and
Massachusetts. In California, we have taken initial steps
to adopt sector strategies by directing portion of
discretionary funds to job training programs for nurses and
workers in allied health fields. This bill helps move our
state towards a more strategic approach of training for our
future workforce needs. The author's office believes that
this bill helps break down the barriers of communication
between the various training entities by encouraging
collaboration to better align resources across workforce
education and training service delivery systems.
Furthermore, this bill helps address some of the concerns
raised by the Auditor's office in the recent audit of WIA.
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Prior Legislation
SB 698 (Lieu), Chapter 487, Statutes of 2011, required the
Governor to establish, through the CWIB, 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
CWIB, 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 allowed the local WIBs to leverage
specified funds to meet this requirement. The bill also
required a local WIB that does not meet the expenditure to
provide the EDD with a corrective action plan regarding
those expenditures.
AB 3018 (Nunez), Chapter 312, Statutes of 2008, enacted the
California Green Collar Jobs Act of 2008, which created the
Green Collar Jobs Council within the CWIB to perform
specified tasks related to addressing the green economy
workforce needs of the state. Specifically, the bill
required the council to develop a comprehensive array of
programs, strategies, and resources to address the state's
growing green economy.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 5/7/12)
California Labor Federation
California Manufacturers and Technology Association
California Teachers Association
City and County of San Francisco
Insight Center for Community Economic Development
Jewish Vocational Service - Los Angeles
Jewish Vocational Services of San Francisco
John Muir Health
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Los Angeles Area Chamber of Commerce
National Skills Coalition
State Building and Construction Trades Council, AFL-CIO
The San Francisco Foundation
ARGUMENTS IN SUPPORT : According to the author's office,
workers in California are facing the toughest jobs crisis
in over 50 years and, unfortunately, at a time when
workers, families and communities need more support, states
are facing unprecedented budget challenges. The author's
office argues that now more than ever, it is crucial that
every dollar of workforce funds is invested in high quality
employment services that connect workers with good paying
jobs.
Proponents argue that despite the state's high unemployment
rate, job openings in key industries are going unfilled
because employers cannot find workers with the necessary
credentials and training for these jobs. In addition, many
of these openings are "middle-skill" jobs, which require
education and training past high school. According to
proponents, 47% of jobs in California's labor market are
middle-skill, but only 38% of Californians likely have the
credentials and training for these jobs. This bill takes
important steps to close this skills gap by providing new
principles to guide the work of the CWIB. Proponents
contend that this bill will greatly enhance and strengthen
our job training infrastructure, but more importantly, will
also measurably improve job prospects and training outcomes
for California's unemployed workers.
Additionally, proponents state that over 30 states and the
District of Columbia have implemented statewide sector
strategies. According to proponents, Pennsylvania stands
at the forefront of this work. Since 2005, Pennsylvania
has helped to support 76 partnerships; with 6,300 employers
actively involved, who have contributed $75 million in
private sector funds. Over 100,000 workers have been
served, resulting in higher wages and retention rates.
PQ:kc 5/9/12 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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