SF 2317 (LSB 5292SV (4) 85)

SENATE FILE 2317

BY  COMMITTEE ON ECONOMIC GROWTH

(SUCCESSOR TO SSB 3052)

A BILL FOR

An Act relating to the jobs training and apprenticeship programs and making appropriations.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 15.108, subsection 6, paragraph a, Code 2014, is amended to read as follows:
   a.  Coordinate and perform the duties specified under the Iowa industrial new jobs training Act in chapter 260E, the Iowa jobs training Act in chapter 260F, and the workforce development fund in section 15.341.
    Sec. 2.  NEW SECTION.  256.91  Workforce development fund account.

   A workforce development fund account is established in the office of the treasurer of state under the control of the department. The account shall receive funds pursuant to section 422.16A up to a maximum of eight million dollars per year.
    Sec. 3.  NEW SECTION.  256.92  Workforce development fund.
   1.  a.  A workforce development fund is created as a revolving fund in the state treasury under the control of the department consisting of any moneys appropriated by the general assembly for that purpose and any other moneys available to and obtained or accepted by the department from the federal government or private sources for placement in the fund. The fund shall also include moneys appropriated to the fund from the workforce development fund account established in section 256.91.
   b.  Notwithstanding section 8.33, moneys in the workforce development fund at the end of each fiscal year shall not revert to any other fund but shall remain in the workforce development fund for expenditure for subsequent fiscal years.
   2.  The assets of the fund shall be used by the department for the following programs and purposes:
   a.  Projects under chapter 260F.
   b.  Apprenticeship programs under chapter 260J.
   3.  Moneys in the workforce development fund shall be allocated as follows:
   a.  Four million dollars shall be transferred and deposited in the job training fund created in section 260F.6 to be used for the purposes provided in chapter 260F.
   b.  Four million dollars shall be transferred and deposited in the apprenticeship training program fund created in section 260J.3 to be used for the purposes provided in chapter 260J.
    Sec. 4.  Section 260C.18A, subsection 2, paragraph b, Code 2014, is amended to read as follows:
   b.  Projects in which an agreement between a community college and a business meet all the requirements of the Iowa jobs training Act under chapter 260F. However, projects funded by moneys provided by a local workforce training and economic development fund of a community college are not subject to the maximum advance or award limitations contained in section 260F.6, subsection 2, or the allocation limitations contained in section 260F.8, subsection 1.
    Sec. 5.  Section 260F.2, subsection 2, Code 2014, is amended by striking the subsection.
    Sec. 6.  Section 260F.2, subsections 4, 5, 10, and 11, Code 2014, are amended to read as follows:
   4.  “Date of commencement of the project” means the date of the preliminary signed agreement or the date an application for assistance is received by the authority.
   5.  “Eligible business” or “business” means a business training employees which is engaged in interstate or intrastate commerce for the purpose of manufacturing, processing, or assembling products, conducting research and development, commercial construction, or providing services in interstate commerce including electronic commerce, but excludes retail, health, or professional services and which meets the other criteria established by the authority department. “Eligible business” does not include a business whose training costs can be economically funded under chapter 260E, a business which closes or substantially reduces its employment base in order to relocate substantially the same operation to another area of the state, or a business which is involved in a strike, lockout, or other labor dispute in Iowa.
   10.  “Program services” includes but is not limited to the following:
   a.  Training of employees.
   b.  Adult basic education and job-related instruction.
   c.  Vocational and skill-assessment services and testing.
   d.  Training facilities, equipment, materials, and supplies.
   e.  Administrative expenses for the jobs training program, in an amount not to exceed five percent of the total project cost.
   f.  Subcontracted services with institutions governed by the state board of regents, private colleges or universities, or other federal, state, or local agencies.
   g.  Contracted or professional services.
   11.  “Project” means a training arrangement which is the subject of an agreement entered into between the community college and a business to provide program services. “Project” also means an authority-sponsored training arrangement which is sponsored by the authority and administered under sections 260F.6A and 260F.6B.
    Sec. 7.  Section 260F.2, Code 2014, is amended by adding the following new subsection:
   NEW SUBSECTION.  4A.  “Department” means the department of education.
    Sec. 8.  Section 260F.3, Code 2014, is amended by adding the following new subsections:
   NEW SUBSECTION.  4A.  Type of training to be delivered.
   NEW SUBSECTION.  4B.  Amount of employer match.
    Sec. 9.  NEW SECTION.  260F.4  Financial assistance —— restrictions.
   1.  The maximum award of financial assistance for any one project is fifty thousand dollars.
   2.  A business may be approved for multiple projects, but the total financial assistance award to a business shall not exceed one hundred thousand dollars within a three-year period.
   3.  An award of financial assistance does not include reimbursement to the business for employee wages while the employee is in training.
   4.  An award of financial assistance is based on the actual cost of services.
   5.  A business’s request for financial assistance shall be commensurate with training needs.
   6.  Community colleges shall provide financial assistance to a business on a reimbursement basis or by directly paying for training expenses from an account administered by the community college.
   7.  a.  A business shall provide a cash match or in-kind match in order to be eligible for financial assistance pursuant to this section.
   b.  A business requesting financial assistance of less than five thousand dollars for a program shall provide an in-kind match.
   c.  A business requesting financial assistance of five thousand dollars or more for a program shall provide cash to pay at least twenty-five percent of the total project cost, including training and administration costs.
   d.  An in-kind match includes employee wages paid by the business during the training period, the value of business-provided facilities and equipment used for training, or the value of any other resource provided by the business to facilitate the training program.
    Sec. 10.  NEW SECTION.  260F.5  Community college annual report.
   1.  Each community college shall submit an annual report to the department by September 1 documenting the job training programs funded during the previous fiscal year.
   2.  The report shall address the performance metrics established by the department for the job training program pursuant to section 260F.8.
   3.  The report shall be submitted in a manner and form prescribed by the department.
    Sec. 11.  Section 260F.6, subsection 1, Code 2014, is amended to read as follows:
   1.  There is established created for the community colleges a job training fund in the economic development authority in the workforce development fund to be administered by the department. The job training fund consists of moneys appropriated for the purposes of this chapter plus the interest and principal from repayment of advances made to businesses for program costs, plus the repayments, including interest, of loans made from that retraining fund, and interest earned from moneys in the job training fund.  Moneys in the fund are appropriated to the department for purposes of this chapter.
    Sec. 12.  Section 260F.6, subsections 2 and 3, Code 2014, are amended by striking the subsections and inserting in lieu thereof the following:
   2.  Moneys in the fund shall be allocated pursuant to the formula established in 260C.18C. Any unexpended or unallocated funds remaining in the job training fund allocated for purposes of the business network training program authorized in section 260F.6A, Code 2014, as of June 30, 2014, shall be distributed to the community colleges in the manner provided for in subsection 2.
   3.  Notwithstanding section 8.33, moneys in the fund at the close of the fiscal year shall not revert to the general fund of the state but shall remain available for expenditure for the purpose designated for subsequent fiscal years. Notwithstanding section 12C.7, subsection 2, interest or earnings on moneys in the fund shall be credited to the fund.
    Sec. 13.  Section 260F.7, Code 2014, is amended to read as follows:
   260F.7  Economic development authority Department to coordinate.

   The economic development authority, in consultation with the department of education and the department of workforce development, shall coordinate the jobs training program. A project shall not be funded under this chapter unless the economic development authority approves the project. The authority department shall adopt rules pursuant to chapter 17A governing the program’s operation and eligibility for participation in the program. The authority department shall establish by rule criteria for determining what constitutes an eligible business.
    Sec. 14.  Section 260F.8, Code 2014, is amended by striking the section and inserting in lieu thereof the following:
   260F.8  Program assessment, development, and coordination.
   1.  The department shall establish performance metrics for the job training programs funded under this chapter and assess program outcomes on an annual basis.
   2.  The department shall allocate ten percent of the moneys in the job training fund created in section 260F.6 annually to the community colleges pursuant to the formula established in section 260C.18C for the following purposes:
   a.  Outreach to employers by community college business and industry outreach staff.
   b.  Monitoring the performance of training agreements and accountability measures.
   c.  Development of training project and program plans.
   d.  Business development activities.
    Sec. 15.  NEW SECTION.  260J.1  Title.

   This chapter shall be known and may be cited as the “Iowa Apprenticeship Act”.
    Sec. 16.  NEW SECTION.  260J.2  Definitions.

   For purposes of this chapter, unless the context otherwise requires:

   1.  “Apprentice” means a person who is at least sixteen years of age, except where a higher minimum age is required by law, who is employed in an apprenticeable occupation, and is registered in Iowa with the United States department of labor, office of apprenticeship.
   2.  “Apprenticeable occupation” means an occupation approved for apprenticeship by the United States department of labor, office of apprenticeship.
   3.  “Apprenticeship program” means a program registered with the United States department of labor, office of apprenticeship, which includes terms and conditions for the qualification, recruitment, selection, employment, and training of apprentices, including the requirement for a written apprenticeship agreement.
   4.  “Apprenticeship sponsor” means an entity operating an apprenticeship program or an entity in whose name an apprenticeship program is being operated, which is registered with or approved by the United States department of labor, office of apprenticeship.
   5.  “Department” means the department of education.
   6.  “Financial assistance” means assistance provided only from the funds, rights, and assets legally available to the department and includes but is not limited to assistance in the forms of grants, loans, forgivable loans, and royalty payments.
   7.  “Fund” means the apprenticeship training program fund created in section 260J.3.
   8.  “Lead apprenticeship sponsor” means a trade organization, labor organization, employer association, or other incorporated entity representing a group of apprenticeship sponsors.
    Sec. 17.  NEW SECTION.  260J.3  Apprenticeship training program —— fund.
   1.  The department shall establish and administer an apprenticeship training program to provide funding to apprenticeship programs in Iowa.
   2.  An apprenticeship training program fund is created in the state treasury under the control of the department. The moneys in the apprenticeship training program fund are appropriated to the department for the apprenticeship training program from the workforce development fund created in section 256.92.
   3.  Moneys in the fund are appropriated to the department for purposes of providing financial assistance for apprenticeship training pursuant to this chapter.
   4.  The department shall subcontract the statewide administration of the apprenticeship program to a community college in Iowa designated by the Iowa association of community college presidents.
   5.  The community college designated pursuant to subsection 4 may annually expend not more than five percent of moneys in the fund for administrative purposes.
   6.  Notwithstanding section 8.33, moneys in the fund at the close of a fiscal year shall not revert to the general fund of the state but shall remain available for expenditure for the purposes designated for subsequent fiscal years. Notwithstanding section 12C.7, subsection 2, interest or earnings on moneys in the fund shall be credited to the fund.
    Sec. 18.  NEW SECTION.  260J.4  Financial assistance for an apprenticeship program.
   1.  a.  An apprenticeship sponsor or lead apprenticeship sponsor conducting apprenticeship programs in Iowa for apprentices who will be employed at Iowa worksites may apply to the department for financial assistance under this section.
   b.  Financial assistance received by an apprenticeship sponsor or lead apprenticeship sponsor under this section shall be used only for the cost of conducting and maintaining an apprenticeship program.
   2.  The department shall provide financial assistance to apprenticeship sponsors or lead apprenticeship sponsors in the following manner:
   a.  By determining the total amount of funding allocated for purposes of apprenticeship programs pursuant to section 260J.3.
   b.  By adding together all of the following:
   (1)  The total number of apprentices trained by all applying apprenticeship sponsors or lead apprenticeship sponsors during the most recent training year as calculated on the last day of the training year.
   (2)  The total number of contact hours that apprenticeship instructors for all applying apprenticeship sponsors or lead apprenticeship sponsors spent in contact with apprentices during the most recent training year. For purposes of this subparagraph, “contact hours” includes the time spent instructing apprentices in person or, in the case of a lead apprenticeship sponsor with programs totaling one hundred or more total instructional hours, “contact hours” includes the time spent in online training if the total amount of online instruction does not account for more than thirty percent of the total instructional hours.
   c.  By adding together all of the following:
   (1)  The total number of apprentices trained by a single applying apprenticeship sponsor or lead apprenticeship sponsor during the most recent training year as calculated on the last day of the training year.
   (2)  The total number of contact hours that apprenticeship instructors for a single applying apprenticeship sponsor or lead apprenticeship sponsor spent in contact with apprentices during the most recent training year. For purposes of this subparagraph, “contact hours” includes the time spent instructing apprentices in person or, in the case of a lead apprenticeship sponsor with programs totaling one hundred or more total instructional hours, “contact hours” includes the time spent in online training if the total amount of online instruction does not account for more than thirty percent of the total instructional hours.
   d.  By determining the proportion, stated as a percentage, that a single applying apprenticeship sponsor’s or lead apprenticeship sponsor’s total calculated pursuant to paragraph “c” bears to all applying apprenticeship sponsors’ or lead apprenticeship sponsors’ total calculated pursuant to paragraph “b”.
   e.  By multiplying the percentage calculated in paragraph “d” by the amount determined in paragraph “a”.
   3.  An apprenticeship sponsor or lead apprenticeship sponsor seeking financial assistance under this section shall provide the following information to the department:
   a.  The federal apprentice registration number of each apprentice in the apprenticeship program.
   b.  The address and a description of the physical location where in-person training is conducted.
   c.  A certification of the apprenticeship sponsor’s training standards as most recently approved by the United States department of labor, office of apprenticeship or, in the case of a lead apprenticeship sponsor, a representative sample of participating members’ training standards.
   d.  A certification of the apprenticeship sponsor’s compliance review or quality assessment as most recently conducted by the United States department of labor, office of apprenticeship, unless the apprenticeship sponsor has not been subjected to a compliance review or quality assessment. In the case of a lead apprenticeship sponsor, a sampling of compliance reviews or quality assessments from participating members shall be sufficient.
   e.  Any other information the department reasonably determines is necessary.
   4.  The apprenticeship sponsor or lead apprenticeship sponsor and the department shall enter into an agreement regarding the provision of any financial assistance to the apprenticeship sponsor or lead apprenticeship sponsor.
   5.  Notwithstanding the provisions of this section, an apprenticeship program receiving funds from section 260F.6 or other community college funding sources in the fiscal year beginning July 1, 2013, and ending June 30, 2014, shall receive no less than that amount in the fiscal year beginning July 1, 2014, and ending June 30, 2015. The department shall develop rules to administer this subsection.
    Sec. 19.  NEW SECTION.  260J.5  Apprenticeship advisory council.

   The department shall establish and facilitate the Iowa apprenticeship advisory council. The council shall advise the department on issues related to apprenticeship programs supported pursuant to this chapter and shall promote the development of new and the expansion of existing apprenticeship programs in Iowa. The council membership shall be appointed by the department, division of community colleges, and shall include but is not limited to the following:

   1.  Three members of labor organizations representing apprenticeship programs.
   2.  Three members of business and construction trade organizations representing apprenticeship programs.
   3.  One member representing Iowa’s community colleges.
   4.  One member representing the department.
   5.  One member representing the United States department of labor, office of apprenticeship.
    Sec. 20.  Section 403.21, subsections 1 and 3, Code 2014, are amended to read as follows:
   1.  In order to promote communication and cooperation among cities, counties, and community colleges with respect to the allocation and division of taxes, no jobs training projects as defined in chapter 260E or 260F shall be undertaken within the area of operation of a municipality after July 1, 1995, unless the municipality and the community college have entered into an agreement or have jointly adopted a plan relating to a community college’s new jobs training program which shall provide for a procedure for advance notification to each affected municipality, for exchange of information, for mutual consultation, and for procedural guidelines for all such new jobs training projects, including related project financing to be undertaken within the area of operation of the municipality. The joint agreement or the plan shall state its precise duration and shall be binding on the community college and the municipality with respect to all new jobs training projects, including related project financing undertaken during its existence. The joint agreement or plan shall be effective upon adoption and shall be placed on file in the office of the secretary of the board of directors of the community college and such other location as may be stated in the joint agreement or plan. The joint agreement or plan shall also be sent to each school district which levied or certified for levy a property tax on any portion of the taxable property located in the area of operation of the municipality in the fiscal year beginning prior to the calendar year in which the plan is adopted or the agreement is reached. If no such agreement is reached or plan adopted, the community college shall not use incremental property tax revenues to fund jobs training projects within the area of operation of the municipality. Agreements entered into between a community college and a city or county pursuant to chapter 28E shall not apply.
   3.  The community college shall send a copy of the final agreement prepared pursuant to section 260F.3 to the economic development authority. For each year in which incremental property taxes are used to retire debt service on a jobs training advance issued for a project creating new jobs, the community college shall provide to the economic development authority a report of the incremental property taxes and new jobs credits from withholding generated for that year, a specific description of the training conducted, the number of employees provided program services under the project, the median wage of employees in the new jobs in the project, and the administrative costs directly attributable to the project.
    Sec. 21.  Section 422.16A, Code 2014, is amended to read as follows:
   422.16A  Job training withholding —— certification and transfer.

   Upon the completion by a business of its repayment obligation for a training project funded under chapter 260E, including a job training project funded under section 15A.8 or repaid in whole or in part by the supplemental new jobs credit from withholding under section 15A.7 or section 15E.197, the sponsoring community college shall report to the economic development authority the amount of withholding paid by the business to the community college during the final twelve months of withholding payments. The economic development authority shall notify the department of revenue of that amount. The department shall credit to the workforce development fund account established in section 15.342A 256.91 twenty-five percent of that amount each quarter for a period of ten years. If the amount of withholding from the business or employer is insufficient, the department shall prorate the quarterly amount credited to the workforce development fund account. The maximum amount from all employers which shall be transferred to the workforce development fund account in any year is four eight million dollars.
    Sec. 22.  Section 558.1, Code 2014, is amended to read as follows:
   558.1  “Instruments affecting real estate” defined —— revocation.

   All instruments containing a power to convey, or in any manner relating to real estate, including certified copies of petitions in bankruptcy with or without the schedules appended, of decrees of adjudication in bankruptcy, and of orders approving trustees’ bonds in bankruptcy, and a jobs training agreement entered into under chapter 260E or 260F between an employer and community college which contains a description of the real estate affected, shall be held to be instruments affecting the same; and no such instrument, when acknowledged or certified and recorded as in this chapter prescribed, can be revoked as to third parties by any act of the parties by whom it was executed, until the instrument containing such revocation is acknowledged and filed for record in the same office in which the instrument containing such power is recorded, except that uniform commercial code financing statements and financing statement changes as provided in chapter 554 need not be thus acknowledged.
    Sec. 23.  REPEAL.  Sections 15.341, 15.342, 15.342A, 15.343, 15.344, 260F.6A, and 260F.6B, Code 2014, are repealed.
    Sec. 24.  RULES.  The department of education shall adopt rules to administer this Act.
    Sec. 25.  TRANSFER OF FUNDS.
   1.  All moneys in section 15.342A as of the effective date of this Act shall be transferred to the workforce development fund account established in section 256.91, as enacted in this Act.
   2.  All moneys in section 15.343 as of the effective date of this Act shall be transferred to the workforce development fund created in section 256.92, as enacted in this Act.
    Sec. 26.  TRANSITION PROVISIONS.
   1.  A financial assistance award made or provided for in an agreement entered into pursuant to section 260F.3 prior to the effective date of this Act shall continue as provided in such agreement.
   2.  Loan payments or repayments and recaptures of principal, interest, or other moneys accruing on or after July 1, 2014, pursuant to an agreement under section 260F.3, as in effect prior to July 1, 2014, shall be transferred to the job training fund created in section 260F.6, as amended by this Act.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill relates to changes to the job training program and fund under Code chapter 260F and establishes an apprenticeship program under new Code chapter 260J.
   WORKFORCE DEVELOPMENT FUND. The bill amends the workforce development fund account and the workforce development fund by eliminating the funds as the funds exist under the economic development authority (“authority”) and transferring the moneys remaining in the fund into the newly established workforce development fund account and workforce development fund, respectively, controlled by the department of education. The job training withholding moneys currently transferred to the workforce development account under the authority will be transferred pursuant to the bill to the newly established workforce development fund account under the department of education. The bill also raises the cap on the withholding amount to be transferred from $4 million to $8 million. The moneys in the workforce development fund under the department of education shall be used for purposes of funding projects for jobs training under Code chapter 260F as amended by the bill and for apprenticeship programs under new Code chapter 260J under the bill. Four million dollars is allocated to each purpose and shall be transferred to the job training fund and the apprenticeship training program fund.
   The bill repeals provisions related to the workforce development fund program operated by the authority.
   JOBS TRAINING PROGRAM. The bill amends the jobs training program and job training fund under Code chapter 260F. Currently, a business and the community college enter into an agreement to establish a project and the authority accepts applications for assistance, sets the criteria for whether a business is eligible for assistance under the program, and coordinates the jobs training program. The bill amends these provisions by no longer requiring the business to submit an application to the authority, allowing the department of education to set the criteria for whether a business is eligible for assistance, and requiring the department of education to coordinate the jobs training program.
   The bill amends the job training fund by establishing the fund under the state treasury rather than within the workforce development fund and transferring the authority over the fund from the authority to the department of education. The bill provides that the moneys in the jobs training fund are appropriated to and shall be allocated to community colleges through a formula established in the chapter related to community colleges. The bill also provides that moneys remaining in the job training fund for the business network training program shall be distributed through this same formula.
   The bill strikes the definition of “authority” and defines “department” as the department of education in Code chapter 260F. The bill amends the definition of “eligible business” in the Code chapter to include commercial construction or a business providing services through electronic commerce in interstate commerce.
   The bill provides that the maximum financial assistance under the jobs training program is $50,000 for any one project and $100,000 for any business during a three-year period. The bill also requires a business to provide a cash match or an in-kind match to be eligible for financial assistance under the jobs training program.
   The bill requires each community college to submit an annual report about the jobs training programs funded during the previous fiscal year to the department of education by September 1. The bill requires the department of education to establish performance metrics for the jobs training programs funded and assess the programs funded. The bill also requires the department of education to allocate 10 percent annually of the moneys in the job training fund to the community colleges for outreach to employers, monitoring the training agreements, development of training projects and program plans, and business development activities.
   The bill provides transition provisions stating that financial assistance awards through the jobs training program made or provided for under agreements between community colleges and businesses entered into prior to July 1, 2014, remain in effect. The bill also states that loan payments, repayments, recaptures, and any other moneys accruing pursuant to those agreements shall be transferred to the job training fund, as amended by the bill.
   APPRENTICESHIP TRAINING PROGRAM. The bill creates the Iowa apprenticeship Act in Code chapter 260J. The chapter provides definitions for “apprentice”, “apprenticeable occupation”, “apprenticeship program”, “apprenticeship sponsor”, “department”, “financial assistance”, “fund”, and “lead apprenticeship sponsor”.
   The bill requires the department of education to establish and administer an apprenticeship training program to provide funding to apprenticeship programs in Iowa. The bill also establishes an apprenticeship training program fund under the control of the department of education in the state treasury for purposes of providing financial assistance for apprenticeship training under the Code chapter. Moneys in the fund are appropriated to the department for the program from the workforce development fund created in Code section 256.92 pursuant to the bill. The bill requires the department of education to subcontract the administration of the apprenticeship program to a community college designated by the Iowa association of community college presidents. The bill allows the community college designated to expend not more than 5 percent of moneys in the apprenticeship training program fund for administrative costs.
   The bill provides that an apprenticeship sponsor or lead apprenticeship sponsor may apply for financial assistance to the department of education for conducting apprenticeship programs in Iowa for apprentices who will work at Iowa worksites.
   The bill specifies that financial assistance is to be allocated to apprenticeship sponsors or lead apprenticeship sponsors by the ratio of the total number of apprentices trained and number of contact hours of instruction for an apprenticeship sponsor or lead apprenticeship sponsor divided by the total number of apprentices trained and contact hours of instruction for all the apprenticeship sponsors or lead apprenticeship sponsors in the previous training year, then multiplied by the moneys allocated for financial assistance to apprenticeship sponsors.
   The bill provides that in order to receive financial assistance, the apprenticeship sponsor or lead apprenticeship sponsor and the department must enter into an agreement.
   The bill requires the department of education to establish an apprenticeship advisory council to advise the department on issues related to apprenticeship programs and promote the development of new and the expansion of existing apprenticeship programs in Iowa.
   RULES AND REPEALS. The bill requires the department of education to adopt rules to administer the bill.
   The bill repeals Code sections relating to the business network training and the high technology apprenticeship program.