SRC-JFA C.S.H.B. 1528 75(R)BILL ANALYSIS


Senate Research CenterC.S.H.B. 1528
By: Oliveira (Sibley)
Economic Development
5-16-97
Committee Report (Substituted)


DIGEST 

Currently, the Smart Jobs program awards customized job training grants to
eligible businesses.  The program was created in 1993 and requires several
modifications to improve the existing program. C.S.H.B. 1528 would add
certain new definitions to the Smart Jobs statute, modify certain wage
requirements, recalculate the amount available for administering the
program, and restrict  the value of Smart Jobs training grants to $1.5
million at a rate of 10 percent of the annual wages of the employee unless
specified conditions are met.  

PURPOSE

As proposed, C.S.H.B. 1528 adds certain new definitions to the Smart Jobs
statute, modifies certain wage requirements, recalculates the amount
available for administering the Smart Jobs Program, and restricts the
value of Smart Jobs training grants to $1.5 million at a rate of 10
percent of the annual wages of the employee unless specified conditions
are met.   

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 481.151, Government Code, to define "emerging
occupation," "manufacturing occupation," "micro-business," and "small
business."  Makes standard recodification and conforming changes.
Redefines "existing employer" and "minority group members."     

SECTION 2. Amends Section 481.154, Government Code, to prohibit certain
costs of the Department of Commerce (department) in any fiscal year from
exceeding five percent of the total amount appropriated for the program
for that year, rather than five percent of the total funds deposited in
the smart jobs fund in that year.  Makes standard recodification changes.  

SECTION 3. Amends Section 481.155, Government Code, as follows:

(a)  Provides that it is the intent of the legislature that, to the
greatest extent practicable, money from the smart jobs fund shall be spent
on all areas of the state.  Authorizes the executive director of the
governing board of the department (executive director) to award a grant or
a combination of grants in any fiscal year to a single employer in excess
of $1,500,000 or at a rate greater than 10 percent of the annual wages of
the new or existing job being created or retained with the grant under
certain conditions.   

(b)-(c)  Makes conforming changes. 

(d)  Prohibits a grant from being awarded for a project under this section
unless each employer participating in the project certifies that the
starting wage for a new job created through the project will be equal to
or greater than the prevailing wage for that occupation in the local labor
market area, rather than greater than 66-2/3 percent of the state average
weekly wage, and that the wage for a job existing on the date that the
project is scheduled to begin will be increased to the greater of three,
rather than 10, percent for a small business or five percent for a
business that is not a small business over the wage in effect on the day
before the date on which the project is scheduled for that job; or 100
percent of the prevailing wage for that occupation in the local labor
market area, rather than 75 percent of the state average weekly wage.
Makes a conforming change.  

(e)  Authorizes an employer to apply for a grant under this chapter, and
an employer who is a micro-business may request a modification of the
requirements provided by Subsection (d) and Section 481.159(c), if, among
other options, substantial change in the skills required to continue the
employer's business exists because of technological changes; or other
reasonable factors exist, as determined by the executive director.  Makes
conforming changes.  

(f)-(j)  Makes conforming changes.  

SECTION 4. Amends Section 481.156(a), Government Code, to authorize one or
more employers to secure training for demand occupations, emerging
occupations, or manufacturing occupations to apply for a grant under this
subchapter.  Authorizes one or more employers acting in partnership with
an employer organization, labor organization, or community-based
organization to secure training for demand occupations, emerging
occupations, or manufacturing occupations to apply for a grant under this
subchapter.  Authorizes one or more employers acting in partnership with a
consortium composed of more than one provider to secure training for
demand occupations, emerging occupations, or manufacturing occupations to
apply for a grant under this subchapter.  Makes conforming changes.  

SECTION 5. Amends Sections 481.159(b) and (c), Government Code, as follows:

(b)  Prohibits total administrative costs for any single employer, rather
than particular, project from exceeding 10 percent of the project's
expenditures.  Prohibits total administrative costs for a consortium
project from exceeding 15 percent of the project's expenditures.   

(c)  Requires 25 percent of allowable expenditures, rather than of the
grant award, to be withheld by the department for 90 days after the date
of completion of the contract, rather than project.  Requires the amount
of allowable expenditures withheld, rather than the grant award, to be
remitted to the employer if at least 85 percent, rather than all, of the
trainees in the project have been retained in employment for that 90-day
period and have successfully achieved the skills and competencies, wage
requirements, and other contractual obligations. Deletes text in regard to
provisions relating to each trainee who is not retained in employment for
a certain 90-day period.   

SECTION 6. Amends Section 481.160(b), Government Code, to require the
annual report to include for that fiscal year, among other items, the wage
levels of trainees entering or returning to the work force, broken down by
current employees undergoing retraining and new hires, at three months and
one year, rather than three years, after the conclusion of their training.

SECTION 7. Effective date: September 1, 1997.

SECTION 8. Emergency clause.   

SUMMARY OF COMMITTEE CHANGES

SECTION 3.

Amends Section 481.155, Government Code, to revise proposed changes to
Subsection (a) to authorize the executive director to award a grant or a
combination of grants in any fiscal year to a single employer in excess of
$1,500,000, rather than $1,000,000, or at a rate greater than 10 percent
of the annual wages of the new or existing job being created or retained
with the grant under certain conditions.   

SECTION 5.

Amends Section 481.159, Government Code, to add proposed changes to
Subsection (b).