HOUSE 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

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (13)

      Signed by Representatives Cantwell, Chair; Wineberry, Vice Chair; Doty, Ranking Republican Member; G. Fisher, Kremen, Moyer, Rasmussen, Raiter, Rector, Schoon, Tate, Walk and Youngsman.

House Staff:Bill Lynch (786-7092)

Rereferred House Committee on Appropriations

Majority Report:  The substitute bill by Committee on Trade & Economic Development be substituted therefor and the substitute bill do pass.  (19)

      Signed by Representatives Locke, Chair; Grant, Vice Chair; H. Sommers, Vice Chair; Appelwick, Belcher, Braddock, Brekke, Bristow, Dorn, Ebersole, Hine, Peery, Rust, Sayan, Spanel, Sprenkle, Valle, Wang and Wineberry.

Minority Report:  Do not pass.  (7)

      Signed by Representatives Silver, Ranking Republican Member; Bowman, Brough, May, McLean, Nealey and Padden.

House Staff:      Maureen Morris (786-7136)

AS PASSED HOUSE MAY 17, 1989

BACKGROUND:

The nature of many jobs is changing, and there is an increasing mismatch between the skills employers require and the skills which job applicants and many current workers possess.

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.  The board recommended that as part of this strategy, there should be an offset of the current employer unemployment tax for providing assistance with training and reemployment.

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. At least one of the business representatives and one of the labor representatives must reside east of the Cascade Mountains. The Governor appoints the voting members of the council, and must appoint at least two of the three business representatives and two of the three labor representatives from lists submitted by the largest statewide employer organization and the largest statewide labor organization.  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 with training providers, private industry councils, or employers or employee organizations submitting proposals jointly with either training providers or private industry councils.

The council may form regional review panels to review training proposals.  Proposal specifications are to be developed by the council and established by rule.  Training providers must be reimbursed for the full cost of training, except that indirect costs may not exceed 10 percent of the total costs.  No more than 15 percent of the total appropriation may be used for administrative costs of the council, the department, or the regional review panels.

The services to be delivered under the program must include vocational training to provide workers with skills required in the labor market, upgrading skills in areas that are necessary to keep pace with technology and the global economy, workplace literacy training - including English as a second language, other training that may be needed to assist workers and employers, and support services approved by the council.

The council may only approve proposals for training that will employ people in 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 develops the proposal specifications and establishes them by rule. The council may establish minimum standards for length of training, wage levels of jobs for which training will be provided, and costs per trainee.  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 must give priority 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 under the program 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 voluntarily by the employer of displacement within 120 days, and displaced homemakers. Displaced homemakers must constitute at least 2 percent of the program participants.

Evaluation of the program is to be performed by the department in conjunction with a research organization with expertise in program analysis selected by the Office of Financial Management. The evaluation must include comparisons with control groups of non- program population and an analysis of compensation levels of job placements.  In addition, an analysis must include the effect of program participation and operation on the unemployment compensation fund, and an assessment of the linkages among the organizations providing the services. 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 raised by the department through a special offset of six one- hundredths of one percent on the state unemployment insurance tax collected from employers. The unemployment insurance tax is reduced by an amount equivalent to that collected for the Employment Futures Fund for most employers.  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.

Fiscal Note:      Available.

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

House Committee ‑ Testified For:    (Trade & Economic Development) Isiah Turner, Director, Department of Employment Security; Mike Fitzgerald, Director, Washington Economic Development Board; Jessamine White, Citizen; Jeff Greendorfer, California Employment Training Panel; Steve Duscha, California Employment Training Panel; Joseph Lilje, Davenport, Washington, Businessman; Thomas Ryan, Pierce County; Phil Lewis, Camano Island, Washington; John House, National Alliance for Business; Evelyn Jackson,  Shelly Stone, and Marjorie Ryan, Displaced Homemakers, Pierce College, Tacoma, Washington; Tim Strege, Council of Vocational-Technical Institutes; Daniel J. McConnon, State Board for Community Colleges, Olympia; Mike Ryherd, Teamster's Union.

(Appropriations) Isiah Turner, Commissioner, Employment Security Department; Parl Knox, Economic Development Board.

House Committee - Testified Against:      (Trade & Economic Development) Larry Kenney, Washington State Labor Council; Cliff Finch, Association of Washington Businesses.

(Appropriations)  None Presented.

House Committee - Testimony For:    (Trade & Economic Development) The demand for trained workers continues to grow.  If more resources are put into training workers, they will be more likely to withstand changes in their job requirements and remain employed. Businesses will move to where the skilled workers are located.

(Appropriations) Same as above.

House Committee - Testimony Against:      (Trade & Economic Development) The use of funds from the Unemployment Insurance Trust Fund sets a bad precedent for funding programs which should be funded out of the general fund. It is a higher priority to allow more unemployed people to draw benefits.

(Appropriations) None Presented.

VOTE ON FINAL PASSAGE:

      Yeas 78; Nays 14; Excused 6 - May 17

Voting Nay: Representatives Ballard, Bowman, Fuhrman, Grant, Heavey, Holland, Jesernig, McLean, Padden, Schmidt, Silver, D. Sommers, S. Wilson and Wolfe

Excused:    Representatives Beck, Betrozoff, Brooks, Brumsickle, Chandler and Hankins