BILL ANALYSIS �
AB 285
Page 1
GOVERNOR'S VETO
AB 285 (Brown)
As Amended July 2, 2013
2/3 vote
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|ASSEMBLY: |76-0 |(April 25, |SENATE: |37-0 |(August 19, |
| | |2013) | | |2013 |
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|ASSEMBLY: |78-0 |(August 26, | | | |
| | |2013) | | | |
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Original Committee Reference: J., E.D. & E.
SUMMARY : Requires, by January 1, 2015, the California Workforce
Investment Board (CWIB) to develop guidelines and/or provide
technical assistance to local workforce investment boards (WIBs)
on how to implement entrepreneurial and self-employment training
programs. The CWIB is directed to develop guidelines in
consultation with appropriate state agencies and small
business-related organizations. This bill makes other related
changes to the definition of microenterprise, as well as deletes
requirements from the duties of the CWIB.
The Senate amendments add provisions to address a potential
statutory conflict should AB 285 and SB 118 (Lieu) of the
current legislative session both be signed.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, implementation of this bill is minor and absorbable.
The measure was referred out of the Senate Appropriations
Committee pursuant to Senate Rule 28.8.
COMMENTS : This measure directs the CWIB to facilitate the
establishment of self-employment training programs through local
WIBs. By doing so, the bill links a currently underserved group
of prospective entrepreneurs, the unemployed, with access to
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quality training and entrepreneurial opportunities of the
post-recession global economy.
The Role of Self-Employment within the California Economy:
Business owners, with no employees make up the single largest
component of businesses in California, 2.8 million out of an
estimated 3.5 million firms in 2010. As these businesses grow,
they continue to serve as an important component of California's
dynamic $1.9 trillion economy. Microenterprises, meaning
businesses with less than five employees represent approximately
93% of all businesses in the state, or approximately 3.2 million
of all businesses. These non-employer and small employer firms
create jobs, generate taxes, and revitalize communities. Common
types of microenterprises include engineering, computer system
design, housekeeping, construction, landscaping, and personnel
services.
These smaller size businesses have historically functioned as
economic engines, especially in challenging economic times. In
this most recent recession the trend continued, with the number
of nonemployer firms increasing from 2.6 million firms ($137
billion in revenues) for 2008 to 2.8 million firms ($138 billion
in revenues) for 2010. In the post-recession economy, these
businesses are expected to become increasingly important due to
their ability to be more flexible and better suited to meet
niche market needs.
However, their small size also results in certain market
challenges, including, but not limited to, having difficulty in
meeting the traditional credit and collateral requirements of
mainstream financial institutions. Specialized technical
assistance, access to microloans, and collaborative marketing
opportunities can help many microenterprises overcome or at
least minimize these difficulties. This bill directs the CWIB
to assist local workforce investment boards to better understand
how their resources can legally be used to meet the needs of
microenterprises.
Local Workforce Investment Board (LWIB) and Microenterprise
Development: The federal Workforce Investment Act of 1998
provides funding for job training and employment investment
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activities and programs in which states may participate,
including work incentive and employment training outreach
programs. In 2012-13 LWIBs received $348 million, while the
state received about $20 million in discretionary moneys.
Among its primary duties, the CWIB provides guidance to 49 WIBs
and the development of a unified, strategic plan to coordinate
various education, training, and employment programs that result
in an integrated workforce development system that supports
economic development.
In 2010, the U.S. Department of Labor released directives
encouraging WIBs to integrate entrepreneurial training within
their local workforce development strategies. This training,
according to microenterprise advocates, has not been
incorporated into the California WIB system in any significant
way. This bill is designed to serve as a catalyst for the
inclusion of self-employment programs within the broader WIB
mission.
In implementing the intent of this bill, WIB's already have
access to in-house expertise through their mandated business and
industry board representatives and many areas of the state have
access to entrepreneurship training programs through
microenterprise development organizations (MDO). CWIB guidance
would most likely recommend using these local resources and
entering into partnerships with MDOs, among others, for
appropriate training and assisting the client to become
connected to the broader public and private network of
entrepreneur resources.
Based on a sampling of state microenterprise programs by the
California Association for Microenterprise Development these
programs, on average, serve approximately 165 clients a year,
76% of which are women, 45% of which are of ethnic minorities,
and 61% are from low-income households.
GOVERNOR'S VETO MESSAGE :
"This bill, like SB 118, deals with the California Workforce
Investment Board and various aspects of job training. Unlike SB
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118, it is overly prescriptive in the way it directs the Board
to provide technical assistance for entrepreneurial training and
to make recommendations. I believe this unduly infringes on the
Board's authority and discretion."
Analysis Prepared by: Toni Symonds / J., E.D. & E. / (916)
319-2090
FN: 0002891