BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 342| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 342 Author: Jackson (D) Introduced:2/23/15 Vote: 21 SENATE LABOR & IND. REL. COMMITTEE: 5-0, 4/22/15 AYES: Mendoza, Stone, Jackson, Leno, Mitchell SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 SUBJECT: California Workforce Investment Board: responsibilities SOURCE: Author DIGEST: This bill requires the California Workforce Investment Board (CWIB) to assist the Governor in helping individuals with barriers to employment, including low-skill, low-wage workers, the long-term unemployed, and members of single-parent households, achieve economic security and upward mobility by implementing policies that encourage the attainment of marketable skills relevant to current labor market trends. ANALYSIS: Existing law: 1)Provides, under the former federal Workforce Investment Act of 1998 (WIA), for activities and programs for job training and employment investment in which states can participate, including work incentive and employment training outreach SB 342 Page 2 programs. 2)Establishes the CWIB and charged it 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 CWIB, in collaboration with specified state and local partners, and the local workforce investment boards (LWIBs) to develop a strategic workforce plan to address the state's economic, demographic, and workplace needs. 4)Provides that the federal Workforce Innovation and Opportunity Act (WIOA), signed into law on July 22, 2014, replaces the WIA. Among other things, the new federal WIOA is designed to help job seekers access employment, education, training, and support services to succeed in the labor market and to match employers with the skilled workers they need to compete in the global economy. This bill requires the CWIB to assist the Governor in helping individuals with barriers to employment, including low-skill, low-wage workers, the long-term unemployed, and members of single-parent households, achieve economic security and upward mobility by implementing policies that encourage the attainment of marketable skills relevant to current labor market trends. Background Under federal law, WIA funds are distributed to the states based on formulas that consider unemployment rates and other economic and demographic factors. California and its 49 LWIBs receive WIA formula funding from the U.S. 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 LWIBs. Fifteen percent 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 SB 342 Page 3 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 LWIBs to support the emergence of effective statewide and regionally driven sector initiatives. Federal WIOA. The federal WIOA, passed by a wide bipartisan majority and signed into law by President Barack Obama on July 22, 2014, is the first legislative reform of the public workforce system in more than 15 years. WIOA supersedes the WIA. WIOA brings together, in strategic coordination, the core programs of federal investment in skill development, including employment and training services for adults, dislocated workers, youth, and individuals with disabilities. WIOA also authorizes programs for specific vulnerable populations including Indian and Native Americans and migrant and seasonal farmworker programs, among others. The following are some highlights of the WIOA reforms: Strategically aligns investments in workforce development programs to ensure that services provided are coordinated and complementary to ensure job seekers acquire skills and credentials that meet employers' needs. Promotes accountability and transparency by ensuring that investments are evidence-based and data-driven, and accountable to participants and tax-payers. Fosters regional collaboration to promote alignment of programs with regional economic development strategies to meet local needs. Improves quality and accessibility of services received by job seekers and employers at their local job centers by, among other things, establishing criteria for certification of the centers that ensures continuous improvements. Improves services to employers and promotes work-based training - matching employers with skilled individuals by promoting the use of industry and sector partnerships. SB 342 Page 4 Promotes the use of Registered Apprenticeship programs which has proven successful at providing workers with career pathways and opportunities to earn while they learn. Streamlines and strengthens the roles of Workforce Development Boards - both state and local - to ensure programs are coordinated, complementary, and consistent across the state. The WIOA provisions take effect on July 1, 2015, the first full program year after enactment. However, the WIOA state unified and local plans and the WIOA performance accountability provisions don't take effect until July 1, 2016. The U.S. Department of Labor will issue further guidance on the timeframes for implementation of WIOA. Prior and Related Legislation SB 45 (Mendoza, 2015) is one of two bills being sponsored by the California Labor and Workforce Development Agency and the CWIB that will make the necessary changes to existing law for the implementation of the federal WIOA in our state. Among other things, this bill requires the state, in conformity with WIOA and after consultation with local boards and chief elected officials, to identify planning regions and require the locals to prepare regional workforce development plans. SB 45 is pending in the Assembly. AB 1270 (Garcia, 2015) is the second bill sponsored by the California Labor and Workforce Development Agency and the CWIB that will make the necessary changes to existing law for the implementation of WIOA. Specifically, AB 1270 updates statutory references to the WIA to instead refer to the WIOA and makes related conforming changes. AB 1270 is pending in the Assembly. SB 118 (Lieu, Chapter 562, Statutes of 2013) required the CWIB to incorporate specific principles into the state's strategic plan that align the education and workforce investment systems of the state to the needs of the 21st century economy and promotes a well-educated and highly skilled workforce to meet the future workforce needs. SB 118 was a re-introduction of SB 1401 (Lieu) from 2012. SB 342 Page 5 SB 1401 (Lieu, 2012) would have required that the CWIB assist the Governor in targeting resources to specified industry clusters that provide economic security and leverage state and federal funds to ensure that resources are invested in activities that meet the needs of specified industry sectors and advance the education and employment of students and workers so they can meet the specified needs of the state, its regional economies, and leading industry sectors. SB 1401 died in the Assembly Appropriations Committee. SB 698 (Lieu, Chapter 497, Statutes of 2011) required the Governor to establish, through the CWIB, standards for certification of high-performance LWIBs, 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 LWIBs. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No SUPPORT: (Verified4/22/15) American Association of University Women California Budget Project California Hospital Association California Labor Federation, AFL-CIO California Manufacturing and Technology Association California Workforce Association Career Ladders Project for the California Community Colleges Los Angeles Area Chamber of Commerce National Council of La Raza Policy Link San Francisco Jewish Vocational Services State Building and Construction Trades Council of California OPPOSITION: (Verified 4/22/15) None received SB 342 Page 6 ARGUMENTS IN SUPPORT: According to the author, historically, throughout our country, workforce development service providers have focused their efforts on easier to place unemployed persons and overlooked those with barriers to employment, like low-skilled employees, who lack economic security. SB 342 ensures that, at the state level, we are prioritizing workforce development in hard to serve communities for people with barriers to employment, including low-skill, low-wage workers, the long-term unemployed, and members of single-parent households. The federal WIOA makes it clear the importance of ensuring workforce development providers prioritize finding jobs for those with barriers to employment. This bill will help workers escape poverty by asking the CWIB to implement policies that encourage the attainment of marketable skills relevant to current labor market trends which will lead to economic security and upward mobility. Prepared by:Alma Perez / L. & I.R. / (916) 651-1556 5/6/15 17:02:24 **** END ****