1-1  By:  Raymond (Senate Sponsor - Montford)              H.B. No. 2858
    1-2        (In the Senate - Received from the House May 15, 1995;
    1-3  May 18, 1995, read first time and referred to Committee on Economic
    1-4  Development; May 26, 1995, reported favorably by the following
    1-5  vote:  Yeas 8, Nays 1; May 26, 1995, sent to printer.)
    1-6                         A BILL TO BE ENTITLED
    1-7                                AN ACT
    1-8  relating to the operation of the smart jobs fund and the employment
    1-9  training program created under that fund.
   1-10        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
   1-11        SECTION 1.  The heading to Subchapter J, Chapter 481,
   1-12  Government Code, is amended to read as follows:
   1-13               SUBCHAPTER J.  SMART JOBS FUND <PROGRAM>
   1-14        SECTION 2.  Section 481.151, Government Code, is amended to
   1-15  read as follows:
   1-16        Sec. 481.151.  DEFINITIONS.  In this subchapter:
   1-17              (1)  "Business development" includes relocation,
   1-18  expansion, turnover, diversification, or technological change.
   1-19              (2)  "Demand occupation" means an occupation in which,
   1-20  as a result of business development, there are or will be positive
   1-21  growth-to-replacement ratios within the next 12 to 24 months,
   1-22  according to the best available sources of state and local labor
   1-23  market information.
   1-24              (3)  "Emerging occupation" means an occupation that:
   1-25                    (A)  arises through forces related to
   1-26  technological changes in the workplace; and
   1-27                    (B)  requires at least two months of customized
   1-28  education or training before a person trained in another field can
   1-29  be reasonably expected to perform the duties of the occupation.
   1-30              (4) <(3)>  "Employee" means an individual who performs
   1-31  services for another under a contract of hire, whether express or
   1-32  implied, or oral or written.
   1-33              (5) <(4)>  "Employer" means a person that employs one
   1-34  or more employees.
   1-35              (6) <(5)>  "Executive director" means the executive
   1-36  director of the department.
   1-37              (7) <(6)>  "Existing employer" means an employer that:
   1-38                    (A)  has been liable to pay contributions under
   1-39  Subtitle A, Title 4, Labor Code <the Texas Unemployment
   1-40  Compensation Act (Article 5221b-1 et seq., Vernon's Texas Civil
   1-41  Statutes)> for more than one year;
   1-42                    (B)  has employees; and
   1-43                    (C)  is in compliance with the reporting and
   1-44  payment requirements of that subtitle <Act>, as determined by the
   1-45  Texas Employment Commission.
   1-46              (8) <(7)>  "Family wage job" means a job that offers:
   1-47                    (A)  wages that start at a level at least equal
   1-48  to 75 percent of <or greater than> the state average weekly wage;
   1-49                    (B)  benefits, such as vacation leave, sick
   1-50  leave, and insurance coverage;
   1-51                    (C)  reasonable opportunities for continued skill
   1-52  development and career path advancement; and
   1-53                    (D)  a substantial likelihood of long-term job
   1-54  security.
   1-55              (9) <(8)>  "In-kind contribution" means a noncash
   1-56  contribution of goods and services provided by an employer as all
   1-57  or part of the employer's matching share of a grant or project.
   1-58              (10) <(9)>  "Job" means employment on a basis
   1-59  customarily considered full-time for the applicable occupation and
   1-60  industry.
   1-61              (11)  "Manufacturing occupation" means an occupation in
   1-62  an industry that is involved in the manufacture of products using
   1-63  mechanical power and machinery.
   1-64              (12) <(10)>  "Minority employer" means a business
   1-65  entity at least 51 percent of which is owned by minority group
   1-66  members or, in the case of a corporation, at least 51 percent of
   1-67  the shares of which are owned by minority group members and that:
   1-68                    (A)  is managed and, in daily operations, is
    2-1  controlled by minority group members; and
    2-2                    (B)  is a domestic business entity with a home or
    2-3  branch office located in this state and is not a branch or
    2-4  subsidiary of a foreign corporation or other foreign business
    2-5  entity.
    2-6              (13) <(11)>  "Minority group members" include members
    2-7  of groups eligible for designation as historically underutilized
    2-8  businesses under Section 481.191 <:>
    2-9                    <(A)  African-Americans;>
   2-10                    <(B)  American Indians;>
   2-11                    <(C)  Asian-Americans; and>
   2-12                    <(D)  Mexican-Americans and other Americans of
   2-13  Hispanic origin>.
   2-14              (14) <(12)>  "Program" means the smart jobs fund
   2-15  <program> created under this subchapter.
   2-16              (15) <(13)>  "Project" means a specific employment
   2-17  training project developed and implemented under this subchapter.
   2-18              (16) <(14)>  "Provider" means a person that provides
   2-19  employment-related training.  The term includes employers, employer
   2-20  associations, labor organizations, community-based organizations,
   2-21  training consultants, public and private schools, technical
   2-22  institutes, junior or community colleges, senior colleges,
   2-23  universities, other institutions of higher education as defined by
   2-24  Section 61.003, Education Code, and proprietary schools, as defined
   2-25  by Section 32.11, Education Code.
   2-26              (17)  "Smart job" means a job that:
   2-27                    (A)  is a family wage job; and
   2-28                    (B)  requires, as a condition of employment,
   2-29  high-level thinking, reasoning, and technical skills.
   2-30              (18) <(15)>  "State average weekly wage" means the
   2-31  annual average of the average weekly wage of manufacturing
   2-32  production workers in this state as of September 1 of each year, as
   2-33  determined by the Texas Employment Commission under Section
   2-34  207.002, Labor Code <3(b), Texas Unemployment Compensation Act
   2-35  (Article 5221b-1, Vernon's Texas Civil Statutes)>, adjusted for
   2-36  regional variances.
   2-37              <(16)  "Targeted industry" means an industry that
   2-38  promotes high-skill, high-wage jobs using Texas-available material
   2-39  and human resources, as determined by the department.>
   2-40              (19) <(17)>  "Trainee" means a participant in a project
   2-41  funded under this subchapter.
   2-42              (20) <(18)>  "Wages" means all forms of compensation or
   2-43  remuneration, excluding benefits, payable for a specific period to
   2-44  an employee for personal services rendered by that employee.
   2-45        SECTION 3.  Sections 481.152(a) and (b), Government Code, are
   2-46  amended to read as follows:
   2-47        (a)  The smart jobs fund <program> is created in the
   2-48  department as a business <work force development> incentive program
   2-49  to enhance employment opportunities and to meet the needs of
   2-50  existing and new industries in this state.
   2-51        (b)  The program shall give priority for funding to projects
   2-52  that offer <the creation and retention of> family wage jobs <and
   2-53  focus on employers in industries that promote high-skill, high-wage
   2-54  jobs in high-technology areas and on demand occupations that
   2-55  provide those jobs>.  At least 60 percent of the money spent under
   2-56  the program shall be used for projects that assist existing
   2-57  employers.
   2-58        SECTION 4.  Section 481.155, Government Code, is amended to
   2-59  read as follows:
   2-60        Sec. 481.155.  GRANTS.  (a)  The executive director may award
   2-61  grants for projects that meet the requirements of this chapter.
   2-62  The executive director shall attempt to ensure that at least 20
   2-63  percent of the total dollar amount of grants awarded under the
   2-64  program are awarded to minority employers.
   2-65        (b)  The program is job-driven.  A grant may not be awarded
   2-66  unless each employer participating in the project certifies that:
   2-67              (1)  a job or job opening exists or will exist at the
   2-68  end of the project for which the grant is sought; and
   2-69              (2)  the job or job opening will be filled by a
   2-70  participant in the project.
    3-1        (c)  A grant may not be awarded for a project under this
    3-2  section unless each employer participating in the project certifies
    3-3  that, by the end of <starting wage for a new job created through>
    3-4  the project, wages will be greater than 75 <66 2/3>  percent of the
    3-5  state average weekly wage.  For <and that the wage for> a job
    3-6  existing on the date that the project is scheduled to begin that
    3-7  already pays a wage at or greater than 75 percent of the state
    3-8  average weekly wage, the employer must certify a five <will be
    3-9  increased to the greater of:>
   3-10              <(1)  10> percent increase in the amount of the wage
   3-11  for <over the wage in effect on the day before> the date on which
   3-12  the project ends <is scheduled to begin for that job; or>
   3-13              <(2)  75 percent of the state average weekly wage>.
   3-14        (d)  An employer may apply for a grant under this chapter and
   3-15  may request a modification of a requirement imposed under
   3-16  Subsection (c) if:
   3-17              (1)  the employer is required to reduce or eliminate
   3-18  the employer's work force because of reductions in overall
   3-19  employment within an industry;
   3-20              (2)  there is <or> a substantial change in the skills
   3-21  required to continue the employer's business because of
   3-22  technological changes; or
   3-23              (3)  other factors occur that the executive director
   3-24  determines reasonable to warrant a modification.
   3-25        (e)  In awarding a grant under Subsection (d) <this
   3-26  subsection>, the executive director may modify the requirements of
   3-27  Subsection (c).  Grants awarded under this subsection for which the
   3-28  executive director has modified the requirements of Subsection (c)
   3-29  may not, in any fiscal year, exceed five <10> percent of the total
   3-30  dollar amount of grants awarded under the program in that year.
   3-31        (f) <(e)>  Unless modified by the executive director under
   3-32  rules adopted by the policy board, a grant may not be awarded for a
   3-33  project unless each employer participating in the project certifies
   3-34  that it will continue to spend on nonmanagerial training an amount
   3-35  from private sources equal to the average amount spent by that
   3-36  employer on such training for the most recent two-year period.
   3-37        (g) <(f)>  A grant may not be awarded for a project if the
   3-38  project will impair existing contracts for services or collective
   3-39  bargaining agreements to which the grant application is subject at
   3-40  the time of the application, except that a project inconsistent
   3-41  with the terms of a collective bargaining agreement may be
   3-42  undertaken with the written concurrence of the collective
   3-43  bargaining unit and the employer or employers who are parties to
   3-44  the agreement.
   3-45        (h) <(g)>  During each state fiscal year the executive
   3-46  director shall attempt to ensure that at least 50 percent of the
   3-47  total dollar amount of grants awarded under this section is awarded
   3-48  to small businesses, as defined by Section 481.101.
   3-49        SECTION 5.  Sections 481.156(a) and (e), Government Code, are
   3-50  amended to read as follows:
   3-51        (a)  The following may apply for a grant under this
   3-52  subchapter:
   3-53              (1)  one or more employers to secure training for
   3-54  demand occupations, emerging occupations, or manufacturing
   3-55  occupations in a particular industry;
   3-56              (2)  one or more employers acting in partnership with
   3-57  an employer organization, labor organization, or community-based
   3-58  organization to secure training for demand occupations, emerging
   3-59  occupations, or manufacturing occupations in a particular industry;
   3-60  or
   3-61              (3)  one or more employers acting in partnership with a
   3-62  consortium composed of one or more providers to secure training for
   3-63  demand occupations, emerging occupations, or manufacturing
   3-64  occupations in a particular industry.
   3-65        (e)  The executive director shall act on a completed
   3-66  application not later than the 30th business day after the date on
   3-67  which the application is filed with the department.
   3-68        SECTION 6.  Section 481.157(b), Government Code, is amended
   3-69  to read as follows:
   3-70        (b)  The policy board may adopt rules modifying the
    4-1  requirements of Subsection (a) for employers with fewer than 100
    4-2  <50> employees and may also adopt rules modifying the requirements
    4-3  of Subsection (a) for projects that provide significant economic
    4-4  benefits to an entire region of the state.
    4-5        SECTION 7.  Section 481.159(b), Government Code, is amended
    4-6  to read as follows:
    4-7        (b)  Reimbursable costs in the contract may include only
    4-8  those expenses related to direct training in job-related basic
    4-9  skills, including literacy skills, job-related vocational skills,
   4-10  and administrative costs.   Total administrative costs <for any
   4-11  particular project> may not exceed 10 percent of direct
   4-12  training-related costs <the project's expenditures>.
   4-13        SECTION 8.  Section 481.160(b), Government Code, is amended
   4-14  to read as follows:
   4-15        (b)  The annual report must include for that fiscal year:
   4-16              (1)  the number of employers receiving grants under the
   4-17  program;
   4-18              (2)  the total amount of grants awarded;
   4-19              (3)  <the value, expressed in dollars and as a
   4-20  percentage of total training expenditures, of matching
   4-21  contributions made by employers;>
   4-22              <(4)>  the number of small businesses, as defined by
   4-23  Section 481.101(3), that receive grants under the program and the
   4-24  total amount of the grants awarded to those businesses;
   4-25              (4) <(5)>  the number of businesses located in
   4-26  enterprise zones, as that term is defined by Chapter 2303 <the
   4-27  Texas Enterprise Zone Act (Article 5190.7, Vernon's Texas Civil
   4-28  Statutes)>, that receive grants under the program and the total
   4-29  amount of the grants awarded to those businesses;
   4-30              (5) <(6)>  the geographical distribution of employers
   4-31  receiving grants under the program;
   4-32              (6) <(7)>  the total number of jobs created, enhanced,
   4-33  or retained under the program, reported by region of the state and
   4-34  by industry <occupation>;
   4-35              (7) <(8)>  the wage levels of trainees entering or
   4-36  returning to the work force, broken down by current employees
   4-37  undergoing retraining and new hires, at three months and <,> one
   4-38  year<, and three years> after the conclusion of their training;
   4-39              (8) <(9)>  the number and percentage of participating
   4-40  employers that provide workers' compensation insurance coverage and
   4-41  the number and percentage of employees covered;
   4-42              (9) <(10)>  the number and percentage of participating
   4-43  employers that offer health care insurance coverage and the number
   4-44  and percentage of employees covered;
   4-45              (10) <(11)>  the number and percentage of women
   4-46  employers and minority employers receiving grants under the program
   4-47  and the total amount of the grants awarded, broken out by group;
   4-48  and
   4-49              (11) <(12)>  the number and percentage of women,
   4-50  minority group members, and disabled individuals participating as
   4-51  trainees in training projects, broken out by group<; and>
   4-52              <(13)  the number and percentage of women private
   4-53  providers and private providers who are minority group members
   4-54  utilized by employers in training projects, broken out by group>.
   4-55        SECTION 9.  This Act takes effect September 1, 1995, and
   4-56  applies only to a grant awarded under the smart jobs fund on or
   4-57  after that date.  A grant awarded before that date is governed by
   4-58  the law in effect on the date that the grant was awarded, and the
   4-59  former law is continued in effect for that purpose.
   4-60        SECTION 10.  The importance of this legislation and the
   4-61  crowded condition of the calendars in both houses create an
   4-62  emergency and an imperative public necessity that the
   4-63  constitutional rule requiring bills to be read on three several
   4-64  days in each house be suspended, and this rule is hereby suspended.
   4-65                               * * * * *