HOUSE BILL REPORT

SSB 5383

As Amended by the House

BYSenate Committee on Economic Development & Labor (originally sponsored by Senators Lee, Smitherman, Anderson, McMullen and Bailey)

Establishing a program for employment and training planning.

House Committe on Trade & Economic Development

Majority Report:  Do pass with amendments.  (12)

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

House Staff:Bill Lynch (786-7092)

Rereferred House Committee on Appropriations

Majority Report:  Do pass as amended by Committee on Trade & Economic Development. (16)

      Signed by Representatives Locke, Chair; Grant, Vice Chair, H. Sommers, Vice Chair; Youngsman, Assistant Ranking Minority Member; Appelwick, Belcher, Brekke, Dorn, Hine, May, Rust, Sayan, Spanel, Valle, Wang and Wineberry.

Minority Report:  Do not pass. (7)

      Signed by Representatives Silver, Ranking Minority Member; Bowman, Brough, Ferguson, McLean, Nealey and Padden.

House Staff:      Maureen Morris (786-7136)

AS PASSED HOUSE APRIL 14, 1989

BACKGROUND:

The federal Job Training Partnership Act (JTPA) of 1982 created a mechanism to establish job training programs for youth and unskilled adults through local service delivery areas.  Several states have adopted comprehensive legislation which institutionalizes into state policy the goals and resources of JTPA.

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 State Job Training Coordinating Council is established, consistent with the provisions of the federal Job Training Partnership Act. (JTPA).  The council is responsible for preparing a two-year plan which describes the programs and activities that will be assisted with federal JTPA funds.  The council may not be a direct provider of services.

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 6/100 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.

Appropriation:    $21,100,000 from the Employment Futures Fund to the Department of Employment Security.

Revenue:    The bill has a revenue impact.

Fiscal Note:      Available.

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

House Committee ‑ Testified For:    (Trade & Economic Development) Senator Eleanor Lee, Prime Sponsor; Susan Dunn, Department of Employment Security; Granville McCormick, Seattle-King County Private Industry Council; Thomas Garrett, Washington State Job Training Coordinating Council, Spokane, Washington; Jan Carlson, Office of the Superintendent of Public Instruction; Dave Steele, North Thurston School District, Lacey, Washington;  Gary Smith, Independent Business Association; Cliff Finch, Association of Washington Businesses; and Linda Matson, National Federation of Independent Business.

(Appropriations) None Presented.

House Committee - Testified Against:      (Trade & Economic Development) Dan McConnon, State Board for Community College Education.

(Appropriations)  None Presented.

House Committee - Testimony For:    (Trade & Economic Development) There is a need to review current training programs.  Reviews should be conducted before additional resources are committed.

(Appropriations) None Presented.

House Committee - Testimony Against:      (Trade & Economic Development) The measure is vague about which programs are affected and goes beyond what is required by federal law.  The measure duplicates current review processes.  Training should be driven by local needs rather than by a state council.  Requiring training for women and minorities at a rate equal to their percentage of the population will result in less of them being trained.

(Appropriations) None Presented.