ARIZONA STATE SENATE
Phoenix, Arizona
job training
programs; administration
Purpose
Replaces the Arizona Job Training Council with the Governor’s Council on Workforce Policy and alters the application criteria and allocation system for job training grants.
The Arizona Job Training Program (program), administered through the Department of Commerce (DOC), provides grants for creating new jobs in Arizona, training of the current workforce to enhance skill levels or for businesses undergoing economic conversion. The program is funded through a job training tax of 0.1 percent of an employer’s taxable wages. The Arizona Job Training Council develops guidelines for selection criteria and program operations, including project application procedures, allowable and excluded project costs, limitations on project costs, procedures to assure urban and rural economic interests and the evaluation of effective use of training monies.
The Governor’s Council on Workforce Policy (Governor’s Council) was established by Executive Order earlier this year and is composed of 27 members appointed by the Governor representing both rural and urban businesses and communities. The mission of the Governor’s Council is to recommend policy and workforce development strategy and to coordinate the 26 state and federal workforce development programs.
According to DOC, problems with coordination between the Governor’s Council, which oversees overall workforce development in the state and strategic use of state and federal resources, and the Job Training Council, which facilitates the use of the program, have resulted in missed opportunities for federal grants. The Department has indicated the Governor’s Council is better positioned to evaluate how to maximize the program’s value as a workforce development tool. H.B. 2265 replaces the Job Training Council with the Governor’s Council.
To be eligible for funding under the program, an Arizona business must meet county wage requirements, pay into the fund, meet the required match and maintain its current level of expenditures for training. According to DOC, many small and rural businesses cannot participate in the program because they cannot meet the statutory qualifying wage (the current qualifying wage for small and rural businesses is 90 percent of the average county wage). H.B. 2265 requires the Governor’s Council to determine the annual qualifying wage based on each county’s economic conditions and needs.
With respect to the allocation of funding, current law sets aside 25 percent for small businesses (less than 100 employees) and 25 percent for rural businesses. According to DOC, as a consequence, medium-sized businesses must compete with large businesses for resources. H.B. 2265 redefines small businesses to include businesses with less than 300 employees and increases the set-aside to 35 percent.
There is no anticipated fiscal impact to the state general fund associated with this measure.
Provisions
1. Replaces the Arizona Job Training Council with the Governor’s Council, established by Executive Order.
2. Prescribes the member of the Governor’s Council.
3. Requires the Governor’s Council to determine the annual qualifying wage rate per county. Stipulates that the qualifying wage rate is to reflect current economic conditions and the needs of the local business in the county.
4. Requires the annual report submitted by the Governor’s Council to include the qualifying wage rate per county.
5. Replaces the requirement that businesses applying for training grants pay compensation based on employer size and location with the requirement that they do so based on qualifying wage rate per county prescribed for the year in which the award was considered.
6. Redefines small businesses (less than 100 employees) to include medium-sized businesses (less than 300 employees) with respect to allocation of funding and increases, from 25 percent to 35 percent, the allocation for such businesses.
7. Stipulates that all records and other property from the Job Training Council are transferred to the Governor’s Council.
8. Makes conforming changes.
9. Provides for a general effective date.
3rd Read 3/26/02 46-12-2-0
Prepared by Senate Staff
April 1, 2002