II 113th CONGRESS 1st Session S. 1226 IN THE SENATE OF THE UNITED STATES June 26, 2013 Mr. Brown (for himself and Ms. Collins ) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions A BILL To promote industry growth and competitiveness and to improve worker training, retention, and advancement, and for other purposes.

1. Short title This Act may be cited as the Strengthening Employment Clusters To Organize Regional Success Act of 2013 or the SECTORS Act of 2013 . 2. Industry or sector partnership grant (a) Amendment Subtitle D of title I of the Workforce Investment Act of 1998 ( 29 U.S.C. 2911 et seq. ) is amended by inserting after section 171 the following: 171A. Industry or sector partnership grant program (a) Purpose It is the purpose of this section to promote industry or sector partnerships that lead collaborative planning, resource alignment, and training efforts across multiple firms for a range of workers employed or potentially employed by a targeted industry cluster, in order to encourage industry growth and competitiveness and to improve worker training, retention, and advancement in targeted industry clusters, including by developing— (1) immediate strategies for regions and communities to fulfill pressing skilled workforce needs; (2) long-term plans to grow targeted industry clusters with better training and a more productive workforce; (3) core competencies and competitive advantages for regions and communities undergoing structural economic redevelopment; and (4) skill standards, career ladders, job redefinitions, employer practices, and shared training and support capacities that facilitate the advancement of workers at all skill levels. (b) Definitions In this section: (1) Career ladder The term career ladder means an identified series of positions, work experiences, and educational benchmarks or credentials that offer occupational and financial advancement within a specified career field or related fields over time. (2) Economic self-sufficiency The term economic self-sufficiency means, with respect to a worker, earning a wage sufficient to support a family adequately over time, based on factors such as— (A) family size; (B) the number and ages of children in the family; (C) the cost of living in the worker’s community; and (D) other factors that may vary by region. (3) Eligible entity The term eligible entity means— (A) an industry or sector partnership; or (B) an eligible State agency. (4) Eligible State agency The term eligible State agency means a State agency designated by the Governor of the State in which the State agency is located for the purposes of the grant program under this section. (5) High-priority occupation The term high-priority occupation means an occupation that— (A) has a significant presence in an industry cluster; (B) is in demand by employers; (C) pays family-sustaining wages that enable workers to achieve economic self-sufficiency, or can reasonably be expected to lead to such wages; (D) has or is in the process of developing a documented career ladder; and (E) has a significant impact on a region’s economic development strategy. (6) Industry cluster The term industry cluster means a concentration of interconnected businesses, suppliers, research and development entities, service providers, and associated institutions in a particular field that are linked by common workforce needs. (7) Industry or sector partnership The term industry or sector partnership means a workforce collaborative that is described as follows: (A) Required members (i) In general An industry or sector partnership is a workforce collaborative that organizes key stakeholders in a targeted industry cluster into a working group that focuses on the workforce needs of the targeted industry cluster and includes, at the appropriate stage of development of the partnership— (I) representatives of multiple firms or employers in the targeted industry cluster, including small- and medium-sized employers when practicable; (II) 1 or more representatives of State labor organizations, central labor coalitions, or other labor organizations, except in instances where no labor representation exists; (III) 1 or more representatives of local boards; (IV) 1 or more representatives of postsecondary educational institutions or other training providers; and (V) 1 or more representatives of State workforce agencies or other entities providing employment services. (ii) Diverse and distinct representation No individual may serve as a member in an industry or sector partnership, as defined in this paragraph, for more than 1 of the required categories described in subclauses (I) through (V) of clause (i). (B) Authorized members An industry or sector partnership may include representatives of— (i) State or local government; (ii) State or local economic development agencies; (iii) other State or local agencies; (iv) chambers of commerce; (v) nonprofit organizations; (vi) philanthropic organizations; (vii) economic development organizations; (viii) industry associations; and (ix) other organizations, as determined necessary by the members comprising the industry or sector partnership. (8) Industry-recognized The term industry-recognized , used with respect to a credential, means a credential that— (A) is sought or accepted by businesses within the industry or sector involved as a recognized, preferred, or required credential for recruitment, screening, or hiring purposes; and (B) is endorsed by a nationally recognized trade association or organization representing a significant part of the industry or sector, where appropriate. (9) Nationally portable The term nationally portable , used with respect to a credential, means a credential that is sought or accepted by businesses within the industry sector involved, across multiple States, as a recognized, preferred, or required credential for recruitment, screening, or hiring purposes. (10) Targeted industry cluster The term targeted industry cluster means an industry cluster that has— (A) economic impact in a local or regional area, such as advanced manufacturing, clean energy technology, and health care; (B) immediate workforce development needs, such as advanced manufacturing, clean energy, technology, and health care; and (C) documented career opportunities. (c) Grants authorized (1) In general From amounts appropriated to carry out this section, the Secretary shall award, on a competitive basis, grants described in paragraph (3) to eligible entities to enable the eligible entities to plan and implement, respectively, the eligible entities’ strategic objectives in accordance with subsection (d)(2)(D). (2) Maximum amount (A) Implementation grants An implementation grant awarded under paragraph (3)(A) may not exceed a total of $2,500,000 for a 3-year period. (B) Renewal grants A renewal grant awarded under paragraph (3)(C) may not exceed a total of $1,500,000 for a 3-year period. (3) Implementation and renewal grants (A) In general The Secretary may award an implementation grant under this section to an eligible entity that has established, or is in the process of establishing, an industry or sector partnership. (B) Duration An implementation grant shall be for a duration of not more than 3 years, and may be renewed in accordance with subparagraph (C). (C) Renewal The Secretary may renew an implementation grant for not more than 3 years. A renewal of such grant shall be subject to the requirements of this section, except that the Secretary shall— (i) prioritize renewals to eligible entities that can demonstrate the long-term sustainability of an industry or sector partnership funded under this section; and (ii) require assurances that the eligible entity will leverage, in accordance with subparagraph (D)(ii), each year of the grant period, additional funding sources for the non-Federal share of the grant which shall— (I) be in an amount greater than— (aa) the non-Federal share requirement described in subparagraph (D)(i)(III); and (bb) for the second and third year of the grant period, the non-Federal share amount the eligible entity provided for the preceding year of the grant; and (II) include at least a 50 percent cash match from the State or the industry cluster, or some combination thereof, of the eligible entity. (D) Federal and non-Federal share (i) Federal share Except as provided in subparagraph (C)(ii) and clause (iii), the Federal share of a grant under this section shall be— (I) 90 percent of the costs of the activities described in subsection (f), in the first year of the grant; (II) 80 percent of such costs in the second year of the grant; and (III) 70 percent of such costs in the third year of the grant. (ii) Non-Federal The non-Federal share of a grant under this section may be in cash or in-kind, and may come from State, local, philanthropic, private, or other sources. (iii) Exception The Secretary may require the Federal share of a grant under this section to be 100 percent if an eligible entity receiving such grant is located in a State or local area that is receiving a national emergency grant under section 173. (4) Fiscal agent Each eligible entity receiving a grant under this section that is an industry or sector partnership shall designate an entity in the partnership as the fiscal agent for purposes of this grant. (5) Use of grant funds during grant periods An eligible entity receiving grant funds under a grant under this section shall expend grant funds or obligate grant funds to be expended by the last day of the grant period. (d) Application process (1) Identification of a targeted industry cluster In order to qualify for a grant under this section, an eligible entity shall identify a targeted industry cluster that could benefit from such grant by— (A) working with businesses, industry associations and organizations, labor organizations, State boards, local boards, economic development agencies, and other organizations that the eligible entity determines necessary, to identify an appropriate targeted industry cluster based on criteria that include, at a minimum— (i) data showing the competitiveness of the industry cluster; (ii) the importance of the industry cluster to the economic development of the area served by the eligible entity, including estimation of jobs created or preserved; (iii) the identification of supply and distribution chains within the industry cluster; and (iv) research studies on industry clusters; and (B) working with appropriate employment agencies, workforce investment boards, economic development agencies, community organizations, and other organizations that the eligible entity determines necessary to ensure that the targeted industry cluster identified under subparagraph (A) should be targeted for investment, based primarily on the following criteria: (i) Demonstrated demand for job growth potential. (ii) Employment base. (iii) Wages and benefits. (iv) Demonstrated importance of the targeted industry cluster to the area’s economy. (v) Workforce development needs. (2) Application An eligible entity desiring to receive a grant under this section shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require. An application submitted under this paragraph shall contain, at a minimum, the following: (A) A description of the eligible entity, evidence of the eligible entity’s capacity to carry out activities in support of the strategic objectives identified in the application under subparagraph (D), and a description of the expected participation and responsibilities of each of the mandatory partners described in subsection (b)(8)(A). (B) A description of the targeted industry cluster for which the eligible entity intends to carry out activities through a grant under this section, and a description of how such targeted industry cluster was identified in accordance with paragraph (1). (C) A description of the workers that will be targeted or recruited by the partnership, including an analysis of the existing labor market, a description of potential barriers to employment for targeted workers, and a description of strategies that will be employed to help workers overcome such barriers. (D) A description of the strategic objectives that the eligible entity intends to carry out for the targeted industry cluster, which objectives shall include— (i) recruiting key stakeholders in the targeted industry cluster, such as multiple businesses and employers, labor organizations, local boards, and education and training providers, and regularly convening the stakeholders in a collaborative structure that supports the sharing of information, ideas, and challenges common to the targeted industry cluster; (ii) identifying the training needs of multiple businesses, especially skill gaps critical to competitiveness and innovation to the targeted industry cluster; (iii) facilitating economies of scale by aggregating training and education needs of multiple employers; (iv) helping postsecondary educational institutions, training institutions, apprenticeship programs, and all other training programs authorized under this Act, align curricula, entrance requirements, and programs to industry demand and nationally portable, industry-recognized credentials (or, if not available for the targeted industry, other credentials, as determined appropriate by the Secretary), particularly for higher skill, high-priority occupations validated by the industry; (v) ensuring that the State agency carrying out the State program under the Wagner-Peyser Act ( 29 U.S.C. 49 et seq. ), including staff of the agency that provide services under such Act, shall inform recipients of unemployment insurance of the job and training opportunities that may result from the implementation of this grant; (vi) informing and collaborating with organizations such as youth councils, business-education partnerships, apprenticeship programs, secondary schools, and postsecondary educational institutions, and with parents and career counselors, for the purpose of addressing the challenges of connecting disadvantaged adults as defined in section 132(b)(1)(B)(v) and disadvantaged youth as defined in section 127(b) to careers; (vii) helping companies identify, and work together to address, common organizational and human resource challenges, such as— (I) recruiting new workers; (II) implementing effective workplace practices; (III) retraining dislocated and incumbent workers; (IV) implementing a high-performance work organization; (V) recruiting and retaining women in nontraditional occupations; (VI) adopting new technologies; and (VII) fostering experiential and contextualized on-the-job learning; (viii) developing and strengthening career ladders within and across companies, in order to enable dislocated, incumbent and entry-level workers to improve skills and advance to higher-wage jobs; (ix) improving job quality through improving wages, benefits, and working conditions; (x) helping partner companies in industry or sector partnerships to attract potential employees from a diverse job seeker base, including individuals with barriers to employment (such as job seekers who are low income, youth, older workers, and individuals who have completed a term of imprisonment), by identifying such barriers through analysis of the existing labor market and implementing strategies to help such workers overcome such barriers; and (xi) strengthening connections among businesses in the targeted industry cluster, leading to cooperation beyond workforce issues that will improve competitiveness and job quality, such as joint purchasing, market research, or centers for technology and innovation. (E) A description of the nationally portable, industry-recognized credentials or, if not available, other credentials, related to the targeted industry cluster that the eligible entity proposes to support, develop, or use as a performance measure, in order to carry out the strategic objectives described in subparagraph (D). (F) A description of the manner in which the eligible entity intends to make sustainable progress toward the strategic objectives. (G) Performance measures for measuring progress toward the strategic objectives. Such performance measures— (i) may consider the benefits provided by the grant activities funded under this section for workers employed in the targeted industry cluster, disaggregated by gender and race, such as— (I) the number of workers receiving nationally portable, industry-recognized credentials (or, if not available for the targeted industry, other credentials) described in the application under subparagraph (E); (II) the number of workers with increased wages, the percentage of workers with increased wages, and the average wage increase; and (III) for dislocated or nonincumbent workers, the number of workers placed in sector-related jobs; and (ii) may consider the benefits provided by the grant activities funded under this section for firms and industries in the targeted industry cluster, such as— (I) the creation or updating of an industry plan to meet current and future workforce demand; (II) the creation or updating of published industry-wide skill standards or career pathways; (III) the creation or updating of nationally portable, industry-recognized credentials, or where there is not such a credential, the creation or updating of a training curriculum that can lead to the development of such a credential; (IV) the number of firms, and the percentage of the local industry, participating in the industry or sector partnership; and (V) the number of firms, and the percentage of the local industry, receiving workers or services through the grant funded under this section. (H) A timeline for achieving progress toward the strategic objectives. (I) In the case of an eligible entity desiring an implementation grant under this section, an assurance that the eligible entity will leverage other funding sources, in addition to the amount required for the non-Federal share under subsection (c)(3)(D), to provide training or supportive services to workers under the grant program. Such additional funding sources may include— (i) funding under this title used for such training and supportive services; (ii) funding under title II; (iii) economic development funding; (iv) employer contributions to training initiatives; or (v) providing employees with employee release time for such training or supportive services. (e) Award basis (1) Geographic distribution The Secretary shall award grants under this section in a manner to ensure geographic diversity. (2) Priorities In awarding grants under this section, the Secretary shall give priority to eligible entities that— (A) work with employers within a targeted industry cluster to retain and expand employment in high wage, high growth areas; (B) focus on helping workers move toward economic self-sufficiency and ensuring the workers have access to adequate supportive services; (C) address the needs of firms with limited human resources or in-house training capacity, including small- and medium-sized firms; and (D) coordinate with entities carrying out State and local workforce investment, economic development, and education activities. (f) Activities (1) In general An eligible entity receiving a grant under this section shall carry out the activities necessary to meet the strategic objectives, including planning activities if applicable, described in the entity’s application in a manner that— (A) integrates services and funding sources in a way that enhances the effectiveness of the activities; and (B) uses grant funds awarded under this section efficiently. (2) Planning activities Planning activities may only be carried out by an eligible entity receiving an implementation grant under this section during the first year of the grant period with not more than $250,000 of the grant funds. (3) Administrative costs An eligible entity may retain a portion of a grant awarded under this section for a fiscal year to carry out the administration of this section in an amount not to exceed 5 percent of the grant amount. (g) Evaluation and progress reports (1) Annual activity report and evaluation Not later than 1 year after receiving a grant under this section, and annually thereafter, an eligible entity shall— (A) report to the Secretary, and to the Governor of the State that the eligible entity serves, on the activities funded pursuant to a grant under this section; and (B) evaluate the progress the eligible entity has made toward the strategic objectives identified in the application under subsection (d)(2)(D), and measure the progress using the performance measures identified in the application under subsection (d)(2)(G). (2) Report to the Secretary An eligible entity receiving a grant under this section shall submit to the Secretary a report containing the results of the evaluation described in subparagraph (B) at such time and in such manner as the Secretary may require. (h) Administration by the Secretary (1) Administrative costs The Secretary may retain not more than 10 percent of the funds appropriated to carry out this section for each fiscal year to administer this section. (2) Technical assistance and oversight The Secretary shall provide technical assistance and oversight to assist the eligible entities in applying for and administering grants awarded under this section. The Secretary shall also provide technical assistance to eligible entities in the form of conferences and through the collection and dissemination of information on best practices. The Secretary may award a grant or contract to 1 or more national or State organizations to provide technical assistance to foster the planning, formation, and implementation of industry cluster partnerships. (3) Performance measures The Secretary shall issue a range of performance measures, with quantifiable benchmarks, and methodologies that eligible entities may use to evaluate the effectiveness of each type of activity in making progress toward the strategic objectives described in subsection (d)(2)(D). Such measures shall consider the benefits of the industry or sector partnership and its activities for workers, firms, industries, and communities. (4) Dissemination of information The Secretary shall— (A) coordinate the annual review of each eligible entity receiving a grant under this section and produce an overview report that, at a minimum, includes— (i) the critical learning of each industry or sector partnership, such as— (I) the training that was most effective; (II) the human resource challenges that were most common; (III) how technology is changing the targeted industry cluster; and (IV) the changes that may impact the targeted industry cluster over the next 5 years; and (ii) a description of what eligible entities serving similar targeted industry clusters consider exemplary practices, such as— (I) how to work effectively with postsecondary educational institutions; (II) the use of internships; (III) coordinating with apprenticeships and cooperative education programs; (IV) how to work effectively with schools providing vocational education; (V) how to work effectively with adult populations, including— (aa) dislocated workers; (bb) women in nontraditional occupations; and (cc) individuals with barriers to employment, such as job seekers who— (AA) are economically disadvantaged; (BB) have limited English proficiency; (CC) require remedial education; (DD) are older workers; (EE) are individuals who have completed a sentence for a criminal offense; and (FF) have other barriers to employment; (VI) employer practices that are most effective; (VII) the types of training that are most effective; (VIII) other areas where industry or sector partnerships can assist each other; and (IX) alignment of curricula to nationally portable, industry-recognized credentials in the sectors where they are available or, if not available for the sector, other credentials, as described in the application under subsection (d)(2)(E); (B) make resource materials, including all reports published and all data collected under this section, available on the Internet; and (C) conduct conferences and seminars to— (i) disseminate information on best practices developed by eligible entities receiving a grant under this section; and (ii) provide information to the communities of eligible entities. (5) Report Not later than 18 months after the date of enactment of the Strengthening Employment Clusters To Organize Regional Success Act of 2013 , and on an annual basis thereafter, the Secretary shall transmit a report to Congress on the industry or sector partnership grant program established by this section. The report shall include a description of— (A) the eligible entities receiving funding; (B) the activities carried out by the eligible entities; (C) how the eligible entities were selected to receive funding under this section; and (D) an assessment of the results achieved by the grant program including findings from the annual reviews described in paragraph (4)(A). (i) Rule of construction Nothing in this section shall be construed to permit the reporting or sharing of personally identifiable information collected or made available under this section. . (b) Conforming amendment The table of contents in section 1(b) of the Workforce Investment Act of 1998 (20 U.S.C. 9201 note) is amended by inserting after the item relating to section 171 the following: 171A. Industry or sector partnership grant program. .