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SB-15 Employment Training Panel: California Jobs Initiative Training Program.(2009-2010)

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SB15:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2009–2010 6th Ext.

Senate Bill
No. 15

Introduced  by  Senator Maldonado

March 16, 2010

An act to amend Section 10214.6 of, to add Section 10214.10 to, and to repeal Section 976.8 of, the Unemployment Insurance Code, relating to employment training, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


SB 15, as introduced, Maldonado. Employment Training Panel: California Jobs Initiative Training Program.
Existing law establishes the Employment Training Panel (ETP) in the Employment Development Department, and prescribes the functions and duties of the ETP with respect to the development, implementation, and administration of various employment training programs in the state.
This bill would require the ETP to establish and administer the California Jobs Initiative Training Program for the purposes of averting job layoffs for incumbent workers, providing new skills to dislocated and underemployed workers, and supporting business expansion in California, and would require the ETP to take all necessary actions to provide for the implementation and administration of the program, as prescribed. The bill would specify that those provisions shall only become operative if specified funding becomes available for the purposes of the program.
Existing law requires the ETP to establish the Partnership for Workforce Recovery Training (PWRT) for the purpose of supporting and implementing the workforce development goals set forth in the American Recovery and Reinvestment Act of 2009 (ARRA).
This bill would eliminate the requirement that the ETP establish the PWRT, and would instead authorize the ETP to allocate funds for the purpose of supporting and implementing the workforce development goals of any special source of government funding other than the employment training tax, including the ARRA, and the federal Workforce Investment Act of 1998. The bill would authorize the ETP to allocate funds under those provisions for workforce development incentives, except for reimbursement of training and administrative costs, as specified.
Existing law authorizes the ETP to allocate any funds it receives pursuant to the federal Workforce Investment Act of 1998 and the ARRA to support the activities of the PWRT.
This bill would delete that authorization.
Existing law requires specified employers to contribute 0.1% of wages into the Employment Training Fund, to be used for employment training purposes, but exempts from that contribution requirement certain employers who have a negative reserve account balance on the computation date.
This bill would delete that exemption for any employer who has a negative reserve balance on the computation date.
Existing law establishes the Unemployment Compensation Disability Fund as a special fund in the State Treasury, but authorizes the Controller to use moneys in the fund for loans to the General Fund, in accordance with specified requirements, including the payment of interest on all moneys loaned to the General Fund.
This bill would require that the Controller immediately transfer the sum of $32,000,000 from the Unemployment Compensation Disability Fund to the Employment Training Fund, in accordance with specified requirements, and transfer the additional sum of $90,000,000 no later than September 1, 2010, to be used for the California Jobs Initiative Training Program, but would specify that the transfer of funds authorized by those provisions are loans, and would require that those funds be repaid with interest in accordance with specified requirements.
The bill would also appropriate the sum of $500,000,000 from the Employment Training Fund to the ETP to implement the Initiative Training Program, as specified.
This bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares all of the following:
(a) California is experiencing unprecedented job loss and high levels of unemployment. To mitigate this situation, there is a critical need to stimulate the economy and swiftly create and retain jobs. A statewide effort is imperative to provide job training and jobs to unemployed and underemployed workers, and job training associated with business expansion and retention in California.
(b) Toward this end, a California Jobs Initiative Training Program should be established to invest $500 million to train workers and create new jobs in the state. The California Jobs Initiative Training Program should focus on providing job training for displaced workers who possess outdated or low demand skills and training for workers in industries where jobs exist or job growth is anticipated. This training should include training related to green jobs and other key industries in California’s economy, such as advanced manufacturing, goods movement, biotechnology, information technology, multimedia, health care, and construction.
(c) To foster the training and hiring of unemployed individuals, the California Jobs Initiative Training Program should combine training reimbursement and a hiring incentive payment to employers. Employers that hire unemployed individuals who complete training under this initiative training program should only receive an incentive payment after the newly hired worker is retained on the job for at least nine months.
(d) The Employment Training Panel (ETP) has a proven record for implementing a joint business-labor training program that funds training to ensure employers have the skilled workers they need to compete locally and globally. The ETP has successfully provided $1.2 billion for training over 760,000 workers in 77,000 businesses over nearly three decades, and the ETP’s infrastructure successfully serves all categories of individuals targeted in the California Jobs Initiative Training Program.

SEC. 2.

 Section 976.8 of the Unemployment Insurance Code is repealed.
976.8.

(a)Section 976.6 does not apply to any employer who has a negative reserve account balance on the computation date.

(b)Subdivision (a) does not apply to an employer assigned the maximum rate pursuant to subdivision (c) of Section 977.

SEC. 3.

 Section 10214.6 of the Unemployment Insurance Code is amended to read:

10214.6.
 (a) The panel shall establish the Partnership for Workforce Recovery Training (PWRT) may allocate funds for the purposes of supporting and implementing the workforce development goals set forth in any law providing a special source of governmental funding, other than from employer contributions paid pursuant to Section 976.6, including the federal American Recovery and Reinvestment Act of 2009 (ARRA) (Public Law 111-5), and the Workforce Investment Act of 1998 (Public Law 105-220). The panel shall develop and publish guidelines for implementing of the PWRT, these purposes consistent with, and including adequate fiscal and accounting controls, as prescribed in subdivision (g) (f) of Section 10205. The panel may enter a partnership or other agreement with another governmental entity for these purposes.

(b)The panel may allocate any funds it receives pursuant to the federal Workforce Investment Act of 1998 (29 U.S.C. Sec. 2801 et seq.) and the ARRA to support the activities of the PWRT. Any funds received by the panel pursuant to this section shall be deposited into a separate account established by the department in the State Treasury, and used for the purposes of this section.

(c)

(b) The panel may adopt any regulations necessary to implement this section, but any regulations so adopted are exempt from the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

(d)

(c) The panel may solicit proposals and enter into contracts or other agreements to secure funding for the purposes of this section, but those proposals, contracts, and agreements shall be exempt from any competitive bidding requirements otherwise prescribed in statute.
(d) The panel may at its sole discretion follow the standards for performance-based contracting set forth in this chapter, on a selective basis. The panel may allocate funds for workforce development incentives, other than reimbursement of training and administrative costs, for the purposes of this section.

SEC. 4.

 Section 10214.10 is added to the Unemployment Insurance Code, to read:

10214.10.
 (a) The panel shall establish and administer the California Jobs Initiative Training Program for the purposes of preventing the layoff of incumbent workers, providing new skills to dislocated and underemployed workers, and supporting business expansion in California. This program shall focus on training for green technology and other key industries in California’s economy, consistent with the panel’s funding priorities, as prescribed in subdivision (b) of Section 10200. The panel shall take all necessary actions to provide for the implementation and administration of the program.
(b) Of the funds available for the program, the panel shall allocate up to two hundred million dollars ($200,000,000) for employment training purposes, and up to three hundred million dollars ($300,000,000) to provide for incentive payments for the hiring and retention of trainees who are unemployed at the start of training.
(c) The panel shall allocate funds available pursuant to subdivision (b) in a manner that is consistent with and that includes adequate fiscal and accounting controls, as prescribed in subdivision (f) of Section 10205. The panel shall provide for the evaluation and audit of projects funded under the program for this purpose.
(d) The panel shall adopt any regulations necessary to implement this section, but any regulations so adopted are exempt from the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
(e) The panel may partner with community colleges, workforce investment boards, economic development organizations, including its existing marketing partners, and local or regional workforce and training organizations to recruit trainees and potential hiring employers, and to deliver training and assist in job placement.
(f) The panel may solicit proposals and enter into performance-based contracts for the purposes of this section. These proposals and contracts shall be exempt from any competitive bidding requirements otherwise prescribed by law. The panel shall take these actions in a manner consistent with subdivision (c) of Section 10205.
(g) For purposes of this section, the following requirements shall apply:
(1) Any employer registered to do business in California shall be eligible for the incentives for new hire trainee placement and retention provided pursuant to this section.
(2) An employer is not required to demonstrate out-of-state competition, as described in subdivision (a) of Section 10200.
(3) Eligible participants may be employed, underemployed, or unemployed at the start of training. For purposes of this section “underemployed” means individuals who are working less than full time, but who seek full-time work.
(4) Any employment covered under this section shall provide earnings, upon completion of the applicable retention period, equal to 40 percent of the state average hourly wage for new hire training and 50 percent of the state average hourly wage for retraining.
(5) To qualify as a training agency, a postsecondary school shall be certified or approved by an entity that satisfies the panel’s standards, as may be established by the panel on a case-by-case basis.
(h) The panel shall comply with the payment, placement, and retention requirements set forth in subdivisions (e) and (f) of Section 10209, with the exception of the following:
(1) For all trainees, final payments to reimburse the cost of training shall not be made until completion of the applicable retention period, as may be modified by the panel on a case-by-case basis.
(2) In order to receive an incentive payment provided for under subdivision (b), a trainee is required to complete nine consecutive months of full-time employment. The panel may modify the retention period necessary for receipt of the incentive payment for trainees in the building trades and other occupations where it is not customary for a worker to be employed for a consecutive time period with a single employer. Employers shall be eligible to receive a three-thousand-dollar ($3,000) incentive payment for each previously unemployed new hire trainee who maintains full-time employment for the applicable retention period. Government entities and nonprofit entities do not qualify for the incentive payments provided under this section.
(i) The panel may delegate to the executive director the authority to approve training contracts of up to one hundred thousand dollars ($100,000), if the contracts meet the requirements of this section and the policies established by the panel, and if the panel regularly reviews the actions taken by the executive director in this regard.
(j) The panel may allocate funds for workforce development incentives, other than reimbursement of training and administrative costs, at its discretion, for the purposes of this section.

(a) The Controller shall immediately transfer the sum of thirty-two million dollars ($32,000,000) from the Unemployment Compensation Disability Fund to the Employment Training Fund as a loan to be used for the purposes of Section 10214.10 of the Unemployment Insurance Code, in accordance with the requirements of Section 3001 of the Unemployment Insurance Code. The Controller shall, no later than September 1, 2010, transfer an additional sum of ninety million dollars ($90,000,000) as a loan from the Unemployment Compensation Disability Fund to the Employment Training Fund to also be used for the purposes of this section, in accordance with the requirements of Section 3001 of the Unemployment Insurance Code.

SEC. 5.

 (b) Upon request of the Director of Employment Development, additional funds may be transferred by the Controller from the Unemployment Compensation Disability Fund to the Employment Training Fund as a loan. To initiate subsequent transfers, the director shall submit a valid claim for expenditures to the Controller and the Director of Finance equal to the amount requested to be transferred from the Unemployment Compensation Disability Fund.
(c) The total amount of the transfers authorized by this section shall not exceed five hundred million dollars ($500,000,000). The funds transferred pursuant to this section are loans to the Employment Training Fund and shall be repaid with interest to the Unemployment Compensation Disability Fund within six years after the date of each transfer. Interest payable on loans from the Unemployment Compensation Disability Fund to the Employment Training Fund shall be computed at a rate determined by the Pooled Money Investment Board based on the current earning rate of the fund from which loaned. Repayment to the Unemployment Compensation Disability Fund shall be paid from revenues from contributions from certain employers generated by the repeal of Section 976.8 of the Unemployment Insurance Code.
(d) Loans from the Unemployment Compensation Disability Fund shall only be made from surplus funds in the Unemployment Compensation Disability Fund. Loans shall not exceed amounts necessary to ensure that there remains an adequate balance in the Unemployment Compensation Disability Fund to provide disability benefits under Part 2 (commencing with Section 2601) of the Unemployment Insurance Code. The annual contributions rate for the Unemployment Compensation Disability Fund required by Section 976.6 of the Unemployment Insurance Code shall not increase as the result of any loan made to the Employment Training Fund pursuant to this section. In calculating the annual disability insurance tax rate each year, the Employment Development Department shall treat outstanding Unemployment Compensation Disability Fund loans as available cash in the Unemployment Compensation Disability Fund.

SEC. 6.

 (a) The sum of five hundred million dollars ($500,000,000) is hereby appropriated from the Employment Training Fund to the Employment Training Panel within the Employment Development Department to implement the provisions of Section 10214.10 of the Unemployment Insurance Code.
(b) The funds transferred pursuant to this section may be used to fund up to 11 staff positions to administer the California Jobs Initiative Training Program established pursuant to Section 10214.10 of the Unemployment Insurance Code, upon the approval of the Department of Finance.

SEC. 7.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to alleviate hardships caused by high rates of unemployment in this state by providing additional funds for employment training, at the earliest possible time, it is necessary that this act take effect immediately.