BILL ANALYSIS



C.S.H.B. 2858
By: Raymond
April 18, 1995
Committee Report (Substituted)


BACKGROUND

Worker training is important to the success of a business,
according to businesses across Texas and the nation.  Texas
businesses need state training to help employees upgrade their
skills so they can compete in a global marketplace.  There is no
federal worker program to assist them in competitive training
because all federal programs assist unemployed workers only.  Local
communities in Texas need an alternative to offering local-taxpayer-financed incentives, such as tax abatements, give-aways
and permit fee waivers in their efforts to convince companies to
move, expand, or consolidate their operations in Texas.  Working
Texans and unemployed Texans need retraining and new skills
development to give themselves a better opportunity to attain high
skill, high wage jobs.

In 1993, the Texas Legislature passed S.B. 130 which created the
Smart Jobs Fund Program to help Texas businesses provide training
for their workers and help create a high skill, high quality Texas
workforce.

PURPOSE

The purpose is to clarify and simplify Smart Jobs Fund services
based on implementation of S.B. 130 enacted by the 73rd Texas
Legislature.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant additional rulemaking authority to a state officer,
department, agency, or institution.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends the heading to Subchapter J, Chapter 481,
Government Code, to read Smart Jobs Fund.

SECTION 2. Amends Section 481.151, Government Code, as follows:

     Sec. 481.151. DEFINITIONS. Adds and changes the definitions to
     "emerging occupation," "existing employer," "family wage job,"
     "manufacturing occupation," "minority group members," "smart
     job," and "state average weekly wage." Deletes the definition
     of "targeted industry."  Renumbers accordingly.

SECTION 3.  Amends Sections 481.152(a) and (b), Government Code, as
follows: (a) The smart jobs fund is created in the department as a
business incentive to enhance employment opportunities. 

     (b) Provides that the program give priority for funding to
     projects that offer family wage jobs and that at least 60
     percent of money spent under the program be used for projects
     that assist existing employers.

SECTION 4.  Amends Section 481.155(c), (d) and adds (e), Government
Code, as follows: (c) Requires the employer, before a grant is
awarded for a project, to certify that by the end of the project,
wages will be greater than 75 percent of the state weekly wage. 
Requires the wage for a job existing on the date the project is
scheduled to begin that already pays a wage at or greater than 75
percent of the state average weekly wage.  The employer must
certify a five percent increase in the amount of the wage for the
date on which the project ends.

     (d) Provides that an employer may apply for a grant, and sets
     forth guidelines by which an employer may request a
     modification of a requirement imposed under Subsection (c) if
     other factors occur that the executive director determines
     reasonable to warrant a modification.

     (e) Provides that the executive director may modify the
     requirements of Subsection (c) in awarding a grant under
     Subsection (d).  Requires that grants awarded under this
     subsection for which the executive director has modified the
     requirements of Subsection (c) may not exceed five percent of
     the total dollar amount of grants awarded in any fiscal year. 
     

This section is relettered accordingly.

SECTION 5. Amends Sections 481.156(a) and (e), Government Code, as
follows: (a) Sets forth those persons or groups who may apply for
a grant under this subchapter, including one or more employers to
secure training for demand occupations, emerging occupations, or
manufacturing occupations.

     (e) Requires the executive director to act on a completed
     application no later than the 30th business day after the
     application is filed with the department.

SECTION 6. Amends Section 481.157(b), Government Code, as follows:
(b) Authorizes the policy board to adopt rules modifying the
requirements of Subsection (a) for employers with fewer than 100
employees and projects that provide significant economic benefits
to an entire region of the state. 

SECTION 7. Amends Section 481.159(b), Government Code, as follows:
(b) Requires reimbursable costs to include only those expenses
related to direct training in job-related basic skills, job-related
vocational skills, and administrative costs.  Prohibits total
administrative costs for any particular project from exceeding 10
percent of the project's direct training-related costs.

SECTION 8. Amends Section 481.160(b), Government Code, by deleting
subsection (b)(3) and (13) and amending as follows:

           (6) the total number of jobs created, enhanced, or
           retained under the program, reported by region of the
           state and by industry;

           (7) the wage levels of trainees entering or returning
           to the work force, broken down by current employees
           undergoing retaining and new hires, at three months and
           one year after the conclusion of their training;

This section is renumbered accordingly.

SECTION 9.  Effective date is September 1, 1995.

SECTION 10. Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute removes from the original bill, under the definition
of "smart job", means a job that may reasonably be considered to be
in high demand.  The original bill removed from the definition of
"wages" "excluding benefits" and adds that the term includes the
reasonable value of any benefits associated with the employment. 
The substitute removes all changes made to "wages" and leaves it as
current language.

The substitute removes from the original bill that the executive
director shall encourage consortiums of small business and minority
business.  The original bill provided for a grant not to be awarded
for a project unless each employer participating in the project
certifies that the wage for a new job created through the project
will be greater than 75 percent of the state average weekly wage by
the end of the project and on the date the project is scheduled to
begin, pays a wage at or greater than 75 percent of the state
average weekly wage will be increased to five percent over the wage
in effect on the day before the date which the project is scheduled
to begin for that job.  The substitute changes the language so that
a grant may not be awarded for a project unless each employer
participating in the project certifies that, by the end of the
project, wages will be greater than 75 percent of the state average
weekly wage.  And, that for a job existing on the date that the
project is scheduled to begin that already pays a wage at or
greater than 75 percent of the state average weekly wage, the
employer must certify a five percent increase in the amount of the
wage for the date on which the project ends.

The original bill provided that the total administrative cost for
any particular project may not exceed 10 percent of the project's
direct training-related costs.  The substitute changes the language
to provide that the total administrative costs may not exceed 10
percent of direct training-related costs.

The original bill specified the requirements for an annual report
that must include the wage level of trainees entering or returning
to the work force, broken down by current employees undergoing
retaining and new hires, at three months, one year, and three years
after the conclusion of their training.  The substitute removes the
three year requirement and leaves the rest of the language the
same.

SUMMARY OF COMMITTEE ACTION

H.B. 2858 was considered by the committee in a public hearing on
April 10, 1995.  Testifying on the bill was Richard Hall,
representing the Texas Department of Commerce.  No one testified
against the bill.  The committee considered a complete substitute
for H.B. 2858.  One amendment was offered to the substitute.  H.B.
2858 and the proposed substitute and amendment was left pending in
committee.  H.B. 2858 was reconsidered by the committee in a formal
meeting on April 11, 1995.  The committee reconsidered the complete
substitute for H.B. 2858.  Two more amendments were offered to the
substitute.  Of the three amendments offered, one of the amendments
was adopted without objection and one was adopted by a record vote
of 6 ayes, 2 nays, 0 pnv, 1 absent.  The substitute as amended was
adopted by a record vote of 8 ayes, 0 nays, 0 pnv, 1 absent.  H.B.
2858 was reported favorably as substituted, with the recommendation
that it do pass and be printed, by a record vote of 8 ayes, 0 nays,
0 pnv, 1 absent.