JKM C.S.H.B. 1639 75(R)BILL ANALYSIS ECONOMIC DEVELOPMENT C.S.H.B. 1639 By: Raymond 4-1-97 Committee Report (Substituted) BACKGROUND The federal Personal Responsibility and Reconciliation Act of 1996 requires states to provide 20 hours of work activities for 25 percent of their public assistance recipients in fiscal year 1997. Work participation requirements will increase 5 percent each year until 2002. In five years, states must have 50 percent of welfare recipients working at least 30 hours a week -- about 88,000 Texans using current enrollment figures. In May 1996, Texas had 244,533 AFDC cases, 171,000 clients eligible for JOBS, and 17, 262 clients who met federal guidelines for JOBS participation. For fiscal year 1997, Texas will have to serve and provide work activities for 29,000 more recipients of public assistance. PURPOSE To create the Texans Work Program as an on-the-job training program for recipients of public assistance; and establish the Texas employment and training account to provide a stipend and benefits to trainees. RULEMAKING AUTHORITY It is the committee's opinion that this bill expressly grants rulemaking authority to the Texas Workforce Commission in SECTION 1 of the bill by adding Sec. 308.005 (a) to Subtitle B, Title 4, Labor Code, to implement the program, including establishing criteria to determine which persons may be required to participate in the program. SECTION BY SECTION ANALYSIS SECTION 1.Amends Subtitle B, Title 4, Labor Code, by adding Chapter 308, Texans Work Program. Sec. 308.001 States that the legislative intent that this chapter is enacted to enlist employers in a partnership with the state to assist recipients of public assistance in developing marketable work skills and obtaining employment. Sec. 308.002 defines "division," "employer," "JOBS training program," "local workforce development board," "program," "trainee," and "training course." Section 308.003 establishes the Texans Work Program as an integrated system of onthe-job training for certain people who receive food stamps under Chapter 33, Human Resources Code, financial assistance under Chapter 31, Human Resources Code, and are eligible to participate in the JOBS training program. The program shall be considered a means-tested program and shall be operated by employers and offer work experience and skills training. The program shall be available in any part of the state in which there is an employer willing to participate and is approved by the local workforce development board or the division. Sec. 308.004(a) provides that training courses shall be designed by local employers and must instruct the trainee in skills that use systems specific to or produced by the employer's industry. Subsection (b) states that a course may not be less than six months or more than 12 months unless approved by the division, and that courses length shall be based on training needs. Subsection (c) provides that an employer who participates shall submit to the division a description of the employer's proposed course. The employer shall work with the division and the Skills Standards Board to incorporate instruction in industry applicable skill standards. Courses must be approved by the commission. Sec. 308.005 provides for the powers and duties of the commission and the division and guidelines for training course approval. Subsection (a) grants the commission rulemaking authority necessary to implement the program, including establishing criteria for determining eligible participants. Subsection (b) states that the commission shall develop guidelines, in cooperation with the Skills Standards Board, for the approval of training courses. Subsection (c) requires the commission to develop guidelines that condition approval on the expectation that a participating employer will develop job descriptions that are relevant to regular paid positions in the employer's workplace or that are available in the community in which the employer is located. Requires that the commission shall consider the following when determining whether to approve a particular training course: the administrative burden imposed by participation in the program by the participating employer; whether the proposed training may reasonably be expected to enhance the employability of individual trainees; whether the proposed training produces a realistic and usable level of skills; whether the training is composed of a greater ratio of training-to-work than regular employees under analogous conditions; whether the employer has any intention of retaining successful trainees as regular employees; the extent to which the proposed training includes nonspecific work skills; and if the employer has previously participated in the program. Subsection (d) authorizes the commission to develop incentives for employers who have completed the training course to hire for at least a year employees who have completed the course. Sec. 308.006 requires the Texas Department of Human Services to provide to the commission and a local workforce board information and technical assistance as necessary to implement the program. Sec. 308.007 provides that participating employers shall provide job training under contract with the local workforce development board or the commission; the employer shall select trainees from a list of eligible participants; the employer selects training methods as long as those methods teach applicable skills at applicable standards; the employer is not liable for payment of payroll and unemployment compensation taxes or benefits and is responsible only for quality training, skills certification, and reporting of attendance; and that the employer shall pay $300 per month per trainee to the commission, which shall deposit the money in the general revenue fund to the credit of the Texas employment and training account. Subsection (f) states that a trainee is considered an employee of the employer for the purposes of Section 401.012, Labor Code. Sec. 308.008 makes provisions to prevent regular employees from being replaced by temporary trainees in the Texans work Program. Subsection (a) requires that, except as provided by Subsection (b), not more than 20 percent of an employer's workforce may consist of trainees under the program, unless, as provided by Subsection (b), an employer has fewer than 50 employees. Subsection (c) requires an employer with regular employees subject to a collective bargaining agreement to notify the applicable collective bargaining agent of the employer's intent to participate in the program. Subsection (d) lays out the circumstances in which a participating employer may not accept a trainee for participation in a training course conducted under the program. Sec. 308.009 Requires each trainee participant in the program to work during the training course not less than the minimum number of hours required under federal law for work participation for public assistance recipients. States that each trainee is entitled to the rights provided under Chapters 21 and 101 as if the trainee were a regular employee, and participation in an administrative dispute resolution procedure by the commission for grievances involving participation in the program. Requires that a skill standards certification be given to each trainee upon successful completion of a training course offered under the program. Sec. 308.010 establishes the Texas employment and training account, composed of employer contributions and state matching funds obtained through the block grant received under the JOBS training program, in the general revenue fund. The money in the fund may be used only for paying training stipends and other training activities authorized by the program. Sec. 308.011 provides for the payment of training stipends. Subsection (a) states that each trainee who demonstrates satisfactory participation shall be paid a monthly stipend. Subsection (b) states the stipends is composed of $600 from the employment and training account and the amount of benefits the trainee is eligible to receive in public assistance. Subsection (c) states that the training stipend will be transferred into the trainees electronic benefits transfer account, if this method is determined by the Texas Department of Human Services to be cost-effective. Subsection (d) declares that the training stipend is not income for the purposes of determining eligibility for and the amount of benefits received under Chapter 31, Human Resources Code; that a trainee who participates in the program is entitled to full public assistance benefits; and that a trainee who quits before the conclusion of the course loses eligibility for training stipends and JOBS benefits but remains eligible for other public assistance. Subsection (e) states that a trainee with excessive unexcused absences may have the training stipend reduced by the commission. Subsection (f) requires the training stipend to be paid on the first workday of each month. Sec. 308.12 Requires the commission to collect information and maintain records regarding the operation and outcome of the program, impediments identified that affect the successful operation of the program, and complaints or other comments regarding the program received by the commission from employers, trainees, regular employees, and local workforce development boards. States that this information is a public record, and requires the commission to report to the 76th Legislature not later than January 31, 1999 regarding this information. Expiration date for this subsection is March 1, 1999. SECTION 2.Amends Subchapter A, Chapter 31, Human Resources Code, by adding Section 31.0037 stipulating that the department may not consider income earned by a participant in Texans Work in determining the amount of financial assistance granted to a trainee for the support of dependent children or whether the family meets household income resource requirements for financial assistance. SECTION 3. Sec. 401.012 (b), Labor Code, is amended by adding that a person who is a trainee in the Texans Work Program, as defined in Section 308.001, Labor Code, is included in the definition of "employee." SECTION 4.Provides that, if a state agency determines that a provision of the act requires a waiver or authorization from the federal government to implement the program, the agency shall request the waiver or authorization and may delay implementing the provision until the waiver or authorization is granted. SECTION 5.States this Act applies only to a person who receives public assistance on or after the effective date of the Act, regardless of the date on which eligibility was determined. SECTION 6.Effective date. SECTION 7.Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE SECTION 1. CSHB 1639 adds a new Sec. 308.001 that states the legislative intent. Subsequent sections are renumbered and conforming changes are made accordingly. CSHB 1639 adds to Sec. 308.003 TEXANS WORK PROGRAM (was Sec. 308.002 of HB 1639) the requirement that the program be "a means-tested program". CSHB 1639 Sec. 308.004 (c) makes conforming changes. CSHB 1639 Sec. 308.005 (Sec. 308.004 of HB 1639) changes the title of the Section by adding "GUIDELINES FOR TRAINING COURSE APPROVAL". Makes conforming changes. HB 1639 Subsection (c) is replaced with CSHB 1639 Subsection (c) that determines factors the commission shall base approval on when developing guidelines under CSHB 1639 Subsection (b). CSHB 1639 Subsection (c) adds specific items the commission shall consider when determining to approve a particular training course. CSHB 1639 adds Subsection (d) which authorizes the commission to develop incentives for employers to hire participants who have completed a training course. CSHB 1639 adds a new Sec. 308.006 POWERS AND DUTIES OF THE TEXAS DEPARTMENT OF HUMAN SERVICES which contains the same language that was in HB 1639 Sec. 308.004, Subsection (c). Directs the Texas Department of Human Services to provide the commission and a local workforce development board with information and assistance as necessary to implement the program. CSHB 1639 renumbers following sections, beginning with the "RIGHTS AND DUTIES OF PARTICIPATING EMPLOYER". CSHB 1639 Sec. 308.007 Subsection (d) (was HB 1639 Sec. 308.005, Subsection (d) ) strikes "workers' compensation coverage" from a list of items a participating employer is not obligated to provide. CSHB 1639 adds a new Subsection (f) that states a trainee is considered an employee of the employer for the purposes of Section 401.012, Labor Code. CSHB 1639 adds a new Sec. 308.008 RIGHTS OF REGULAR EMPLOYEES which makes provisions to prevent regular employees from being replaced by temporary trainees in the Texans work Program. Requires that, except as provided by Subsection (b), not more than 20 percent of an employer's workforce may consist of trainees under the program, unless an employer has fewer than 50 employees. Requires an employer with regular employees subject to a collective bargaining agreement to notify the applicable collective bargaining agent of the employer's intent to participate in the program. Lays out the circumstances in which a participating employer may not accept a trainee for participation in a training course conducted under the program. CSHB 1639 adds a more detailed Sec. 308.009 RIGHTS AND DUTIES OF PARTICIPATING TRAINEES (was HB 1639, Sec. 308.006) that requires each trainee participant in the program to work during the training course not less than the minimum number of hours required under federal law for work participation for public assistance recipients. States that each trainee is entitled to the rights provided under Chapters 21 and 101 as if the trainee were a regular employee, and participation in an administrative dispute resolution procedure by the commission for grievances involving participation in the program. Requires that a skill standards certification be given to each trainee upon successful completion of a training course offered under the program. CSHB 1639 Sec. 308.011 (was HB 1639 Sec. 308.008) makes changes in Subsection (b) to eliminate the need for subsections. CSHB 1639 Subsection (c) allows the Texas Department of Human Services to electronically transfer benefits if the department determines the method of electronic benefits transfer to be cost effective. CSHB 1639 Subsection (d) states that the stipend does not constitute income to the trainee and adds to this statement "for purposes of determining eligibility for and the amount of benefits received under Chapter 31, Human Resource Code." CSHB 1639 adds a new Subsection (f) which requires the training stipend to be paid on the first of each month. CSHB 1639 adds a new Sec. 308.012 REPORTS; RECORDS which requires the commission to maintain records for public review on the operation and outcome of the program, impediments to the program, and complaints, as well as report this information to the 76th Legislature. CSHB 1639 adds a new SECTION 3 to amend Sec. 401.012 (b), Labor Code by adding Subsection 3 to include in the definition of "employee" "a person who is a trainee in the Texans Work Program, as that term is defined in Section 308.001, Labor Code." CSHB 1639 renumbers following sections accordingly.