HF 2457 (LSB 6781YH (3) 91)

HOUSE FILE 2457

BY  GOSA and RAMIREZ

A BILL FOR

An Act establishing the credential-attainment program within the department of workforce development, making appropriations, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  260K.1  Title.
   This chapter shall be known and may be cited as the “Credential-attainment Program Act”.
    Sec. 2.  NEW SECTION.  260K.2  Definitions.
   As used in this chapter:
   1.  “Community college” means a community college established under chapter 260C or a consortium of two or more community colleges.
   2.  “Credential” means a postsecondary certificate or other competency-based credential that is not authorized for federal student aid under Tit. IV of the federal Higher Education Act of 1965, as amended. “Credential” does not include an associate degree or any degree beyond an associate degree.
   3.  “Credential-attainment program” means a program established pursuant to section 260K.3.
   4.  “Economic downturn” includes a layoff of existing employees, reduced employment levels, increased inventories, or reduced sales, if specified in the program agreement entered into under section 260K.3.
   5.  “Employer” means a business or consortium of businesses engaged in interstate or intrastate commerce for the purpose of manufacturing, processing, or assembling products, construction, conducting research and development, or providing services in interstate or intrastate commerce, but excludes retail services.
   6.  “Participant” means an individual who is participating in a credential-attainment program.
   7.  “Program costs” means all necessary and incidental costs of providing program services.
   8.  “Program job” means a high-wage job available from an employer pursuant to a program agreement entered into under section 260K.3.
   9.  “Program job credit” means the credit as provided in section 260K.4.
   10.  “Program job position” means a job position which is planned or available for an employee by the employer pursuant to a program agreement.
   11.  “Program services” includes but is not limited to all of the following, provided that they are pursuant to a program agreement entered into under section 260K.3:
   a.  Program needs assessment and development.
   b.  Job task analysis.
   c.  Curriculum development and revision.
   d.  Instruction.
   e.  Instructional materials and supplies.
   f.  Computer software and upgrades.
   g.  Instructional support.
   h.  Administrative and student services.
   i.  Related school-to-career training programs.
   j.  Skill or career interest assessment services and testing.
   k.  Contracted services.
   12.  “School district” means a school district as described in chapter 274.
    Sec. 3.  NEW SECTION.  260K.3  Program agreements.
   1.  a.  A community college may enter into an agreement with an employer in the community college’s merged area and a school district in the community college’s merged area to establish a credential-attainment program pursuant to which the community college agrees to provide students who are enrolled in the school district in grades nine through twelve with access to an educational program that is designed to lead to a credential while the student is enrolled in high school, and the employer agrees to fund part of the program costs pursuant to section 260K.4 and to hire into a high-wage program job all students who complete the educational program, attain the credential, and graduate high school.
   b.  The credential-attainment program shall be developed by the community college, employer, and school district, and, if a bargaining agreement is in place that covers employees of the employer, a representative of the bargaining unit.
   2.  A program agreement may include reasonable and necessary provisions to implement the credential-attainment program. If a program agreement is entered into, the community college, employer, and school district shall notify the department of revenue as soon as possible. The community college shall also file a copy of the program agreement with the department of workforce development as required in section 260K.5. The program agreement shall provide for program costs, including deferred costs, which may be paid from any of the following sources:
   a.  Program job credits which the employer receives based on the number of program job positions agreed to by the employer to be available under the agreement.
   b.  Cash or in-kind contributions by the employer toward the program cost. At a minimum, the employer contribution shall be twenty percent of the program costs.
   c.  Tuition, student fees, or special charges fixed by the community college to defray program costs.
   d.  Guarantee by the employer of payments to be received under paragraphs “a” and “b”.
   3.  A program agreement must do all of the following:
   a.  Include a provision that specifies the type and amount of funding sources that will be used to pay for program costs.
   b.  Require program costs to be adjusted on an annual basis based on the required program services and for a specific number of participant positions.
   c.  Describe program services and schedules for implementation.
   d.  Provide for a wage level of no less than two hundred percent of the federal poverty level for a family of two as defined by the most recently revised poverty income guidelines as published by the United States department of health and human services at the time the agreement is entered into. The wage level must be recertified for each year provided in the agreement on the anniversary of the effective date of the agreement.
   e.  Provide for employer default procedures.
   4.  The term of a program agreement shall not exceed five years from the date of the program agreement. However, the program agreement may be renewed.
   5.  A program agreement must allow an employer to decline to hire a student who completes the educational program, attains the credential, and graduates high school, as required by subsection 1, paragraph “a”, if the employer experiences an economic downturn.
    Sec. 4.  NEW SECTION.  260K.4  Program job credits from withholding.
   In order to develop and retain program jobs within the state, a program agreement entered into under section 260K.3 may include a provision for program job credits based on program jobs identified in the program agreement. If a program agreement provides that part of the program costs are to be met by receipt of program job credits, the method to be used shall be as follows:
   1.  Program job credits shall be based upon the program job positions identified and agreed to in the program agreement.
   2.  Eligibility for program job credits shall be based on certification of program job positions and program job wages by the employer at the time established in the program agreement. An amount up to ten percent of the gross program job wage, as certified by the employer in the program agreement, shall be credited from the total payment made by an employer pursuant to section 422.16. The employer shall receive a credit against all withholding taxes due by the employer regardless of whether the withholding from the employer of current program job wages is less than ten percent. The employer shall remit the amount of the credit quarterly in the same manner as withholding payments are reported to the department of revenue, to the community college to be allocated to and when collected paid into a special fund of the community college to pay, in part, the program costs. The community college shall remit to the treasurer of state for deposit in the general fund of the state any moneys received by the community college from the employer after the program costs have been paid.
   3.  The employer shall certify to the department of revenue that the program job credit is in accordance with the program agreement and shall provide other information the department of revenue may require.
   4.  A community college shall certify to the department of revenue that the amount of the program job credit is in accordance with the program agreement and shall provide other information the department of revenue may require.
   5.  Employees from an employer participating in a program agreement shall receive full credit for the amount withheld as provided in section 422.16.
    Sec. 5.  NEW SECTION.  260K.5  Maximum statewide credential-attainment program job credit.
   1.  a.  The total amount of credential-attainment program job credits from all employers which shall be allocated for all credential-attainment programs in the state in any one fiscal year shall not exceed five million four hundred thousand dollars.
   b.  A community college shall file a copy of each program agreement with the department of workforce development. The department of workforce development shall maintain an annual record of the proposed credential-attainment program job credits under each program agreement for each fiscal year.
   c.  Upon receiving a copy of a program agreement, the department of workforce development shall allocate any available amount of credential-attainment program job credits to the community college according to the program agreement sufficient for the fiscal year and for the term of the program agreement. When the total available credential-attainment program job credits are allocated for a fiscal year, the department of workforce development shall notify all community colleges that the maximum amount has been allocated and that further credential-attainment program job credits will not be available for the remainder of the fiscal year.
   d.  Once credential-attainment program job credits have been allocated to a community college, the full allocation shall be received by the community college throughout the fiscal year and for the term of the program agreement even if the statewide credential-attainment program job credit maximum amount is subsequently allocated and used.
   2.  a.  The department of workforce development shall administer the statewide allocations of credential-attainment program job credits to credential-attainment programs.
   b.  The department of workforce development shall divide equally among the community colleges thirty percent of the credential-attainment program job credits available for each fiscal year for allocation to each community college to be used to provide funding for approved credential-attainment programs. If any portion of the allocation to a community college under this paragraph has not been committed by April 1 of the fiscal year for which the allocation is made, the uncommitted portion is available for use by other community colleges.
   c.  Once a community college has committed its allocation for any fiscal year under this subsection, the community college may receive additional credential-attainment program job credit allocations from those credential-attainment program job credits authorized and still available for that fiscal year.
    Sec. 6.  NEW SECTION.  260K.6  Customer tracking system.
   All participants in the credential-attainment program shall be included in the customer tracking system implemented by the department of workforce development pursuant to section 84A.5 following program completion.
    Sec. 7.  NEW SECTION.  260K.7  Fund established —— allocation of moneys.
   1.  A credential-attainment program fund is established in the state treasury under the control of the department of workforce development. Moneys in the credential-attainment program fund are appropriated to the department of workforce development for purposes of funding the cost of credential-attainment program capital projects for vertical infrastructure as defined in section 8.57, subsection 3, paragraph “c”.
   2.  If moneys are appropriated by the general assembly to the department of workforce development for deposit in the credential-attainment program fund, such moneys shall be allocated equally to each community college.
    Sec. 8.  NEW SECTION.  260K.8  Administration and reporting.
   1.  The department of workforce development shall adopt rules pursuant to chapter 17A to administer this chapter.
   2.  The department of workforce development shall submit an annual report to the general assembly on or before March 15 each year that contains information related to the credential-attainment program.
    Sec. 9.  EFFECTIVE DATE.  This Act takes effect July 1, 2027.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill establishes the credential-attainment program within the department of workforce development.
   The bill authorizes a community college to enter into an agreement with an employer and a school district to establish a credential-attainment program pursuant to which the community college agrees to provide students who are enrolled in the school district in grades 9 through 12 with access to an educational program that is designed to lead to a credential while the student is enrolled in high school, and the employer agrees to fund part of the program costs and to hire into a high-wage program job all students who complete the educational program, attain the credential, and graduate high school. The bill provides that the credential-attainment program is to be developed by the community college, employer, and school district, and, if a bargaining agreement is in place that covers employees of the employer, a representative of the bargaining unit.
   The bill requires the community college, employer, and school district to notify the department of revenue if a program agreement is entered into, and the community college is also required to file a copy of the program agreement with the department of workforce development.
   The bill establishes that the program agreement is required to provide for program costs, and authorizes sources from which program costs may be paid, which include program job credits. The bill establishes other requirements related to the program agreement, including that the program agreement must include a provision that specifies the type and amount of funding sources that will be used to pay for program costs; require program costs to be adjusted on an annual basis; describe program services and schedules for implementation; provide for a specified wage level; and provide employer default procedures. The term of a program agreement cannot exceed five years; provided, however, that a program agreement may be renewed. A program agreement must allow an employer to decline to hire a student if the employer experiences an economic downturn.
   The bill establishes the method that is required to be used if a program agreement provides that part of the program costs are to be met by receipt of program job credits. Pursuant to that method, program job credits are to be based on the program job positions identified in the program agreement. Eligibility for program job credits is based on certification of program job positions and program job wages by the employer. An amount up to 10 percent of the gross program job wage is credited from the total payment made by an employer pursuant to Code section 422.16 (withholding of income tax at source —— penalties —— interest —— declaration of estimated tax —— bond). The employer receives a credit against all withholding taxes due by the employer regardless of whether the withholding from the employer of current program job wages is less than 10 percent. The employer is required to remit the amount of the credit quarterly in the same manner as withholding payments are reported to the department of revenue to the community college to be allocated to, and when collected, paid into a special fund of the community college to pay, the program costs. The employer is required to certify to the department of revenue that the program job credit is in accordance with the program agreement, and the community college is required to certify to the department of revenue that the amount of the program job credit is in accordance with the program agreement. Employees from an employer participating in a program agreement receive full credit for the amount withheld as provided in Code section 422.16.
   The total amount of credential-attainment program job credits from all employers which shall be allocated for all credential-attainment programs in the state in any one fiscal year cannot exceed $5.4 million. The bill requires the department of workforce development to maintain an annual record of the proposed credential-attainment program job credits under each program agreement for each fiscal year. The bill requires the department of workforce development to administer the statewide allocation of credential-attainment program job credits and establishes a process related to how the department of workforce development allocates available credential-attainment program job credits.
   The bill requires all participants in the credential-attainment program to be included in the customer tracking system implemented by the department of workforce development following program completion.
   The bill establishes a credential-attainment program fund in the state treasury under the control of the department of workforce development. The moneys in the fund are appropriated to the department of workforce development for purposes of funding the cost of credential-attainment program capital projects for vertical infrastructure. The bill provides that if the general assembly appropriates moneys for this purpose, such moneys are required to be allocated equally to each community college.
   The bill requires the department of workforce development to adopt rules to administer the credential-attainment program and to submit annual reports to the general assembly relating to the credential-attainment program.
   The bill defines “community college”, “credential”, “credential-attainment program”, “economic downturn”, “employer”, “participant”, “program costs”, “program job”, “program job credit”, “program job position”, “program services”, and “school district”.
   The bill takes effect July 1, 2027.