(a) The local chief elected officials in a local workforce development area shall form, pursuant to guidelines established by the Governor and the board, a local workforce development board to plan and oversee the workforce investment system.

(b) The Governor shall periodically certify one local board for each local area in the state, following the requirements of the federal Workforce Innovation and Opportunity Act of 2014.

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(c) The Governor shall establish, through the California Workforce Development Board, standards for certification of high-performance local workforce development boards. The California Workforce Development Board shall, in consultation with representatives from local workforce development boards, initiate a stakeholder process to determine the appropriate measurable metrics and standards for high-performance certification. These standards shall be implemented on or before January 1, 2013, and the first certification of high-performance boards shall occur on or before July 1, 2013. Certification and recertification of each high-performance local workforce development board shall occur thereafter midway through the implementation of the local and regional plans required by the Workforce Innovation and Opportunity Act. In order to meet the standards for certification, a high-performance local workforce development board shall do all of the following:

(1) Consistently meet or exceed negotiated performance goals for all of the measures in each of the three federal Workforce Innovation and Opportunity Act of 2014 customer groups, which consist of adults, dislocated workers, and youth.

(2) Consistently meet the statutory requirements of this division.

(3) Develop and implement local policies and a local strategic plan that meets all of the following requirements:

(A) Meets all local and regional planning requirements specified under the federal Workforce Innovation and Development Act of 2014.

(B) Is consistent with the California Workforce Development Board State Plan.

(C) Describes the actions that the board shall take to implement local policies in furtherance of its goals.

(D) Serves as a written account of intended future courses of action aimed at achieving the specific goals of the local and state board within a specific timeframe.

(E) Explains what needs to be done, by whom, and when each action is required to occur in order to meet those goals.

(4) Demonstrate that the local planning process involves key stakeholders, including the major employers and industry groups in the relevant regional economy and organized labor.

(5) Demonstrate that the local planning process takes into account the entire workforce training pipeline for the relevant regional economy, including partners in K-12 education, career technical education, the community college system, other postsecondary institutions, and other local workforce development areas operating in the relevant regional economy.

(6) Demonstrate that the local planning process and plan are data driven, and that policy decisions at the local level are evidence based. Each high-performance local workforce development board shall use labor market data to develop and implement the local plan, taking care to steer resources into programs and services that are relevant to the needs of each workforce development area’s relevant regional labor market and high-wage industry sectors. Local workforce development areas shall demonstrate an evidence-based approach to policymaking by establishing performance benchmarks and targets to measure progress toward local goals and objectives.

(7) Demonstrate investment in workforce initiatives, and, specifically, training programs that promote skills development and career ladders relevant to the needs of each workforce investment area’s regional labor market and high-wage industry sectors.

(8) Establish a youth strategy aligned with the needs of each workforce investment area’s regional labor market and high-wage industry sectors.

(9) Establish a business service plan that integrates local business involvement with workforce initiatives. This plan at a minimum shall include all of the following:

(A) Efforts to partner with businesses to identify the workforce training and educational barriers to attract jobs in the relevant regional economy, existing skill gaps reducing the competitiveness of local businesses in the relevant regional economies, and potential emerging industries that would likely contribute to job growth in the relevant regional economy if investments were made for training and educational programs.

(B) An electronic system for both businesses and job seekers to communicate about job opportunities.

(C) A subcommittee of the local workforce development board that further develops and makes recommendations for the business service plan for each local workforce development board in an effort to increase employer involvement in the activities of the local workforce development board. The subcommittee members should be comprised of business representatives on the local workforce development board who represent both the leading industries and employers in the relevant regional economy and potential emerging sectors that have significant potential to contribute to job growth in the relevant regional economy if investments were made for training and educational programs.

(d) The Governor and the Legislature, as part of the annual budget process, in consultation with the California Workforce Development Board, shall annually reserve a portion of the 15-percent discretionary fund made available pursuant to the federal Workforce Innovation and Opportunity Act of 2014 for the purpose of providing performance incentives to high-performance local workforce development boards. The remaining discretionary funds shall continue to be available for other discretionary purposes as provided for in the federal Workforce Innovation and Opportunity Act of 2014.

(e) Only a workforce development board that is certified as a high-performance local workforce development board by the California Workforce Development Board shall be eligible to receive any incentive money reserved for high-performance local workforce development boards, as described in subdivision (d). A board that is not certified as a high-performance local workforce development board shall not receive any portion of the money reserved for high-performance local workforce development boards, as described in subdivision (d).

(f) The California Workforce Development Board shall establish a policy for the allocation of incentive moneys to high-performance local workforce development boards.

(g) To the extent permitted by the Workforce Innovation and Opportunity Act of 2014, the California Workforce Development Board may consider the utilization of incentive grants, or direct assistance, or both, to local workforce development boards for the purposes of this section.

(h) There shall not be a requirement to set aside federal Workforce Innovation and Opportunity Act of 2014 funds for the purposes of subdivision (d), (e), (f), or (g) in years when the federal government significantly reduces the share of federal Workforce Innovation and Opportunity Act of 2014 funds appropriated to the state for statewide discretionary purposes below the federal statutory amount of 15 percent.

(Amended by Stats. 2016, Ch. 86, Sec. 298. (SB 1171) Effective January 1, 2017. See conditional termination clause in Section 14007.)