SENATE BILL REPORT

ESHB 1294

BYHouse Committee on Trade & Economic Development (originally sponsored by Representatives Rector, Cantwell, Doty, Schoon, Rasmussen, Moyer, Raiter, Day, Peery, Wineberry, Winsley, Dorn, Morris, Dellwo, Heavey, Prentice, Leonard, Valle, Wang, G. Fisher, Basich, Kremen, Jones, Cooper, Walk, R. King, Phillips, Hine, Todd, Pruitt, Brekke, H. Myers, Ebersole, Jacobsen, Inslee, Crane, Sprenkle and P. King) 

Establishing the Washington employment futures program.

House Committe on Trade & Economic Development

Rereferred House Committee on Appropriations

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):March 21, 1989; March 28, 1989

Majority Report:  Do pass as amended.

      Signed by Senators Lee, Chairman; Anderson, Vice Chairman; McMullen, Matson, Murray, Saling, Smitherman, Warnke, Williams.

Senate Staff:Jack Brummel (786-7428)

                  March 28, 1989

AS REPORTED BY COMMITTEE ON ECONOMIC DEVELOPMENT & LABOR, MARCH 28, 1989

BACKGROUND:

A skilled and flexible workforce is recognized as essential to the state's capacity to compete in the world economy.  There is an increasing mismatch between the skills employers require and the skills which job applicants and many current workers possess.  With reductions in federal funding, the demand for state support for training has grown.  Only a small percentage of workers who require training or retraining can be served by the Job Training Partnership Act (JTPA) programs or other training programs.

The Washington State Economic Development Board has stated that comprehensive changes must occur in education, training, and retraining in order to produce a work force that can compete in a global economy.  A number of states have adopted a method for funding training programs which relies on the mechanism used by the unemployment insurance trust fund.

SUMMARY:

The Washington Employment Futures Program is established to provide training and related services to eligible participants.

The program is administered by the Washington Council on Employment Futures.  The council consists of six voting members and eight nonvoting members.  Three of the voting members must represent business and three of the voting members must represent labor. The nonvoting members of the council consist of the Superintendent of Public Instruction, the Executive Director of the State Board for Vocational Education, the Executive Director of the State Board for Community College Education, a legislator from each of the four caucuses, and the Commissioner of Employment Security who chairs the council.  The Department of Employment Security provides administrative support to the council.

The council contracts for training services with training providers, private industry councils, or employers or employee organizations.  Proposals are submitted jointly with either training providers or private industry councils.

Training providers must be reimbursed for the full cost of training.  Indirect costs, however, may not exceed 10 percent of the total costs and 25 percent of the costs shall not be paid to the provider until the trainee is placed and employed for at least 90 days.

Proposals must demonstrate the provider's past success in training and job placement, as well as the employment demand for the proposed trainees.  The council may only approve proposals for training that prepare people for jobs with definite career potential and long-term job security.  At least 75 percent of the funds must be expended for training linked to specific job openings.  The council may establish minimum standards for length of training, wage levels of jobs for which training will be provided, and costs per trainee.

Priority is given to training proposals in areas of critical skill shortages, for jobs in businesses that would likely fail were it not for the provision of the training, for jobs in businesses that are either newly locating in the state or expanding employment in the state, and for jobs in distressed areas.

Eligible participants include unemployment insurance claimants, individuals who have exhausted their unemployment benefits within the previous 24 months, employees who have received notice under the federal law regarding displacement within the next 60 days, employees who receive notice of displacement under any similar state law, employees who receive notice from the employer of displacement within 120 days, and displaced homemakers.

The department is to perform an evaluation of the program and develop a statewide tracking system to follow the post program employment history of program participants.  An interim report is required by January 1, 1990.  Yearly evaluations are required by January 1, 1991 and 1992.  A detailed evaluation report is required by January 1, 1993.

The employment futures fund is established to provide the resources for the Employment Futures Program.  Fund contributions are collected by the department from employers at a rate of six one- hundredths of 1 percent of employee wages.  For most employers, the unemployment insurance tax is reduced by an amount equivalent to that collected for the employment futures fund.  Moneys in the fund must be appropriated.  Contributions to the employment futures fund commence on January 1, 1989.

The Washington Employment Futures Program terminates on June 30, 1993.

Appropriation:    $21,100,000 is appropriated from the employment futures fund to the Employment Security Department.

Revenue:    yes

Fiscal Note:      available

Effective Date:The bill contains an emergency clause and takes effect immediately.

SUMMARY OF PROPOSED SENATE AMENDMENT:

The amendment establishes the Washington State Job Training Coordinating Council, consistent with the provisions of the federal Job Training Partnership Act.  The coordinating council develops a coordination plan for the state's workplace training efforts.  The council also establishes standards and criteria for the allocation of federal JTPA moneys and for local private industry council efforts.  In addition, the council, through a literacy subcommittee, prepares a plan to improve adult literacy services in the state.  The Governor may transfer to the council other coordinating duties required of other entities under federal law.  The council is to conduct analyses of training programs, supply and demand of training services and other matters relating to training in the state by December 1, 1989 and make recommendations to the Legislature.

The provisions relating to the Council on Employment Futures and the distribution of employment futures funds are deleted.  The collection and expenditure of Employment Futures funds is contingent on future legislative action.  A subcommittee of the coordinating council is to solicit and approve training proposals which will use Employment Futures funds, if approved by the Legislature.

Senate Committee - Testified: Representative Rector, original sponsor (pro); Representative Doty (pro); Paul Barden, King County Council (pro); Gary Smith, IBA