AB1534 - Federal Workforce Pell Grant program: local workforce development boards: participant training requirement.

Amended IN Senate August 21, 2026 Amended IN Senate August 19, 2026 Amended IN Senate June 15, 2026 Amended IN Assembly March 19, 2026 Amended IN Assembly March 05, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 1534 Introduced by Assembly Member Irwin (Coauthor: Assembly Member Alanis) January 05, 2026 An act to add Sections 69870.5, 69871.5, and 69873.5 to the Education Code, and to amend, repeal, and add Sections 14017.1 and 14211 of the Unemployment Insurance Code, relating to workforce education and development. LEGISLATIVE COUNSEL'S DIGEST AB 1534, as amended, Irwin. Federal Workforce Pell Grant program: local workforce development boards: participant training requirement. (1) Beginning on July 1, 2026, for the financial aid award year of 2026–27 and each award year thereafter, existing federal law establishes the federal Workforce Pell Grant program to award grants to eligible students who are enrolled, or accepted for enrollment, in a short-term educational program that, among other things, provides an education aligned with the requirements of high-skill, high-wage, or in-demand industry sectors or occupations, as provided. Existing law establishes the Labor and Workforce Development Agency, which is composed of various departments responsible for protecting and promoting the rights and interests of workers in California. Existing law establishes the Student Aid Commission as the primary state agency for the administration of state-authorized student financial aid programs available to students attending all segments of postsecondary education. This bill would prohibit a postsecondary educational institution from disbursing federal Workforce Pell Grant program funds to students enrolled in the institution’s short-term programs, and advertising, marketing, or informing students about the availability of those funds unless the institution has (A) obtained authorization from the commission, on behalf of the Governor, that the institution meets the requirements of specified provisions related to the federal Workforce Pell Grant program, and (B) obtained approvals and met all requirements set forth by the United States Department of Education. This bill would prohibit the commission from authorizing a postsecondary educational institution to receive federal Workforce Pell Grant program funds for a short-term program if the institution, among other things, partners, contracts, or affiliates with an entity that is not accredited by a specified accrediting agency, as provided. The bill would authorize the commission to use the California Priority Jobs Credentials Programs List to determine whether a short-term program satisfies specified requirements under the federal Workforce Pell Grant program, as provided. (2) Existing federal law, the Workforce Innovation and Opportunity Act (WIOA), provides for workforce development activities, including activities in which states may participate. Existing state law, the California Workforce Innovation and Opportunity Act (CalWIOA), establishes the California Workforce Development Board to assist the Governor in the development, oversight, and continuous improvement of California’s workforce investment system and the alignment of the education and workforce investment systems to the needs of the 21st century economy and workforce. CalWIOA creates the Consolidated Work Program Fund in the State Treasury, for the receipt of all moneys deposited pursuant to WIOA and requires moneys in the fund to be made available, upon appropriation by the Legislature, to the Employment Development Department for expenditure consistent with the purposes of WIOA. Existing law contains various programs for job training and employment investment, including work incentive programs, as specified, and establishes local workforce investment boards to perform duties related to the implementation and coordination of local workforce investment activities. Existing law requires local workforce investment boards to spend a minimum percentage of specified funds for adults and dislocated workers on federally identified workforce training programs and allows the boards to leverage specified funds to meet the funding requirements, as specified. Existing law requires a local workforce development area that does not meet the expenditure requirements to submit a corrective action plan to the Employment Development Department that provides reasons for not meeting the requirements and describes actions taken to address the identified expenditure deficiencies. Existing law also requires the department to calculate for each local workforce development board whether the local workforce development board met the expenditure requirements and make annual reports regarding the training and supportive services expenditures. This bill, starting July 1, 2028, instead of requiring the local workforce development boards to spend a minimum percentage of specified funds for adults and dislocated workers, would require the boards to ensure that at least 50% of participants enrolled in the adult and dislocated worker programs receive workforce training services, and would prescribe the training services that count toward the participant training requirement. The bill would require a local workforce development area that does not meet the participant training requirement to submit a corrective action plan to the Employment Development Department that provides reasons for not meeting that requirement and describes actions taken to address the identified participant training deficiencies. By imposing new requirements on local workforce development boards, the bill would impose a state-mandated local program. The bill would require the Employment Development Department to calculate for each local workforce development board, among other things, whether the local workforce development board met the participant training requirement and make annual reports regarding the number of participants enrolled in adult and dislocated worker program, the percentage of those enrolled participants receiving training services, and the training expenditures and supportive service expenditures made by local workforce development boards, as specified. The bill would also make nonsubstantive conforming changes. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. (a) The Legislature finds and declares all of the following: (1) The federal Workforce Pell Grant program (Public Law 119-21) allows funding to be used for certain short-term workforce training programs that demonstrate positive employment and earnings outcomes. (2) In implementing the federal Workforce Pell Grant program, states may impose standards to protect students from financially risky, low-quality, or fraudulent short-term programs and to protect students from incurring debt they cannot repay. (3) Title I of the federal Workforce Innovation and Opportunity Act (WIOA) of 2014 (Public Law 113-128) provides another funding stream for workforce training services for adults and dislocated workers. (4) A report commissioned by the California Workforce Development Board in 2022 found that California’s WIOA-enrolled participants who received targeted training services were significantly more likely to find employment and earn higher wages compared to those who only received basic career services. (5) Encouraging more participants to receive training, rather than spending more dollars on training, will increase access to high-quality, no-cost or low-cost workforce training and education offered through community colleges and adult schools, and deepen collaborations between local workforce development boards and community colleges. (6) A participant training requirement will leverage federal Workforce Pell Grant program funds as a new funding stream to support training that would allow more WIOA dollars to be spent on supports and services to increase participants’ completion and job placement. (b) It is the intent of the Legislature to expand access to high-quality workforce training opportunities by defining standards for short-term programs to be eligible for the federal Workforce Pell Grant program and requiring an increase in participants that receive workforce training services under Title I of WIOA. SEC. 2. Section 69870.5 is added to the Education Code, to read: 69870.5. A postsecondary educational institution shall not disburse Workforce Pell Grant program funds to students enrolled in the institution’s short-term programs, and shall not advertise, market, or inform students about the availability of those funds, unless the institution has met both of the following: (a) Obtained authorization from the commission, on behalf of the Governor, pursuant to this article. (b) Obtained approvals and met all requirements set forth by the United States Department of Education. SEC. 3. Section 69871.5 is added to the Education Code, to read: 69871.5. The commission shall not authorize a postsecondary educational institution to receive Workforce Pell Grant program funds for a short-term program if the institution does any of the following: (a) Partners, contracts, or affiliates with an entity, including an institution or organization, that is not accredited by an accrediting agency recognized and approved by the United States Department of Education and that provides the instructors for the instruction of the short-term program, unless one of the following applies: (1) The institution partners, contracts, or affiliates with the entity for the purpose of offering instruction for a registered apprenticeship program. (2) The short-term program has a contract education agreement with a participating community college and a provider pursuant to Section 78021, provided that both the institution and the short-term program meet all applicable federal Title IV (20 U.S.C. Sec. 1070 et seq.) and Workforce Pell Grant program requirements. (3) The institution meets all of the following requirements: (A) Clearly and prominently discloses, and ensures that the entity clearly and prominently discloses, that the entity is a company that is separate from the institution and a description of all of the services that the entity is contracted to provide for the institution in all of the following places: (i) On the institution’s internet website and any internet website controlled by the entity that is related to the institution’s short-term program. (ii) In marketing materials used by the institution or the entity about the short-term program. (iii) In oral communications with prospective students of the short-term program that are made by the institution or the entity. (B) Ensures the entity is not paid using incentive compensation or tuition sharing with the institution. (C) Ensures the entity does not exercise authority of any kind over the institution’s governance or decisionmaking processes, including participation in any deliberative or decisionmaking committee, task force, or other body, related to the design or development of course curriculum or instruction, setting of short-term program admission standards, determining enrollment targets, or creation of new short-term programs. The entity may provide consultation or technical assistance in an advisory capacity only, and the institution shall retain sole and independent authority for all final decisions. (b) Offers or affiliates with a company that offers financing for the short-term program using a private educational loan, including an income share agreement or a similar type of credit product, other than loans or payment plans that charge no interest to a student. (c) (1) Charges tuition and fees to a student for the short-term program that is more than the maximum amount of Workforce Pell Grant program funds available for a student in the short-term program, as determined by the Secretary of the United States Department of Education, for the period of time that the program is offered. (2) Paragraph (1) shall not apply to any portion of tuition and fees that exceeds the maximum Workforce Pell Grant program amount if that excess amount is paid on behalf of the student by an employer, a labor-management partnership, or another third party, provided that the third party is not a lender or an offeror of a private education loan or other credit product for which the student bears any responsibility for repayment. SEC. 4. Section 69873.5 is added to the Education Code, to read: 69873.5. (a) The commission may use the California Priority Jobs Credentials Programs List to determine whether a short-term program satisfies the following requirements under the Workforce Pell Grant program: (1) Provides an education aligned with the requirements of high-skill, high-wage, or in-demand industry sectors or occupations. (2) Meets the hiring requirements of employers in high-skill, high-wage, or in-demand sectors or occupations. (3) Leads to a recognized postsecondary credential that is stackable and portable across more than one employer or prepares students enrolled in the short-term program for employment in an occupation for which there is only one recognized postsecondary credential and that awards students with the credential upon completion of the short-term program. (b) The Labor and Workforce Development Agency may enter into a data-sharing agreement with the Office of Cradle-to-Career Data to the extent it is necessary to establish and maintain the California Priority Jobs Credential Programs List. SEC. 5. Section 14017.1 of the Unemployment Insurance Code is amended to read: 14017.1. (a) To ensure that job training services investments are linked to regional labor market demand and provide opportunities for upward mobility, the board and the Employment Development Department shall work collaboratively to measure and report on training-related job placement outcomes for individuals receiving job training services provided through the workforce system, including all job training services funded by Title I of the federal Workforce Innovation and Opportunity Act (Pub. L. 113-128) and through grants administered by the board, regardless of the source of the moneys. (b) For purposes of measuring training-related job placement outcomes, gathering data to report, and otherwise fulfilling subdivision (a), the board and the Employment Development Department shall work collaboratively to create a plan to use th [Text truncated for display. Full text available on Congress.gov.]