By Oliveira                                           H.B. No. 1528

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the smart jobs fund program.


 1-4           SECTION 1.  Section 481.151, Government Code, is amended to

 1-5     read as follows:

 1-6           Sec. 481.151.  DEFINITIONS. In this subchapter:

 1-7                 (1)  "Business development" includes relocation,

 1-8     expansion, turnover, diversification, or technological change.

 1-9                 (2)  "Demand occupation" means an occupation in which,

1-10     as a result of business development, there are or will be positive

1-11     growth-to-replacement ratios within the next 12 to 24 months,

1-12     according to the best available sources of state and local labor

1-13     market information.

1-14                 (3)  "Emerging occupation" means an occupation that

1-15     arises from forces related to technological changes in the

1-16     workplace and the work of which cannot be performed by workers

1-17     from other occupations without at least two months of customized

1-18     education or training.

1-19                 (4)  "Employee" means an individual who performs

1-20     services for another under a contract of hire, whether express or

1-21     implied, or oral or written.

1-22                 (5) [(4)]  "Employer" means a person that employs one

1-23     or more employees.

1-24                 (6) [(5)]  "Executive director" means the executive

 2-1     director of the department.

 2-2                 (7) [(6)]  "Existing employer" means an employer that:

 2-3                       (A)  has been liable to pay contributions under

 2-4     Subtitle A, Title 4, Labor Code ([the] Texas Unemployment

 2-5     Compensation Act) [(Article 5221b-1 et seq., Vernon's Texas Civil

 2-6     Statutes)] for more than one year;

 2-7                       (B)  has employees; and

 2-8                       (C)  is in compliance with the reporting and

 2-9     payment requirements of that Act, as determined by the Texas

2-10     Workforce [Employment] Commission.

2-11                 (8) [(7)]  "Family wage job" means a job that offers:

2-12                       (A)  wages equal to or greater than the state

2-13     average weekly wage;

2-14                       (B)  benefits, such as vacation leave, sick

2-15     leave, and insurance coverage;

2-16                       (C)  reasonable opportunities for continued skill

2-17     development and career path advancement; and

2-18                       (D)  a substantial likelihood of long-term job

2-19     security.

2-20                 (9) [(8)]  "In-kind contribution" means a noncash

2-21     contribution of goods and services provided by an employer as all

2-22     or part of the employer's matching share of a grant or project.

2-23                 (10) [(9)]  "Job" means employment on a basis

2-24     customarily considered full-time for the applicable occupation and

2-25     industry.

2-26                 (11)  "Manufacturing occupation" means an occupation

2-27     that is involved in the mechanical or chemical transformation of

 3-1     materials or substances into new products.

 3-2                 (12)  "Micro-business" means an eligible business with

 3-3     not more than 20 employees.

 3-4                 (13) [(10)]  "Minority employer" means a business

 3-5     entity at least 51 percent of which is owned by minority group

 3-6     members or, in the case of a corporation, at least 51 percent of

 3-7     the shares of which are owned by minority group members and that:

 3-8                       (A)  is managed and, in daily operations, is

 3-9     controlled by minority group members; and

3-10                       (B)  is a domestic business entity with a home or

3-11     branch office located in this state and is not a branch or

3-12     subsidiary of a foreign corporation or other foreign business

3-13     entity.

3-14                 (14) [(11)]  "Minority group members" include:

3-15                       (A)  African-Americans;

3-16                       (B)  American Indians;

3-17                       (C)  Asian-Americans; [and]

3-18                       (D)  Mexican-Americans and other Americans of

3-19     Hispanic origin; and

3-20                       (E)  women.

3-21                 (15) [(12)]  "Program" means the smart jobs fund

3-22     program created under this subchapter.

3-23                 (16) [(13)]  "Project" means a specific employment

3-24     training project developed and implemented under this subchapter.

3-25                 (17) [(14)]  "Provider" means a person that provides

3-26     employment-related training.  The term includes employers, employer

3-27     associations, labor organizations, community-based organizations,

 4-1     training consultants, public and private schools, technical

 4-2     institutes, junior or community colleges, senior colleges,

 4-3     universities, and proprietary schools, as defined by Section

 4-4     132.001, Education Code.

 4-5                 (18)  "Small business" has the meaning assigned that

 4-6     term by Section 481.101.

 4-7                 (19) [(15)]  "State average weekly wage" means the

 4-8     annual average of the average weekly wage of manufacturing

 4-9     production workers in this state as of September 1 of each year, as

4-10     determined by the Texas Workforce [Employment] Commission [under

4-11     Section 3(b), Texas Unemployment Compensation Act (Article 5221b-1,

4-12     Vernon's Texas Civil Statutes)], adjusted for regional variances.

4-13                 (20) [(16)]  "Targeted industry" means an industry that

4-14     promotes high-skill, high-wage jobs using Texas-available material

4-15     and human resources, as determined by the department.

4-16                 (21) [(17)]  "Trainee" means a participant in a project

4-17     funded under this subchapter.

4-18                 (22) [(18)]  "Wages" means all forms of compensation or

4-19     remuneration, excluding benefits, payable for a specific period to

4-20     an employee for personal services rendered by that employee.

4-21           SECTION 2.  Section 481.154, Government Code, is amended to

4-22     read as follows:

4-23           Sec. 481.154.  FUNDING.  (a)  The smart jobs fund is

4-24     established as a special trust fund in the custody of the state

4-25     treasurer separate and apart from all public money or funds of this

4-26     state.  The fund is composed of:

4-27                 (1)  money transferred into the fund under Section

 5-1     204.123, Labor Code [9e, Texas Unemployment Compensation Act

 5-2     (Article 5221b-1 et seq., Vernon's Texas Civil Statutes)];

 5-3                 (2)  gifts, grants, and other donations received by the

 5-4     department for the fund; and

 5-5                 (3)  any amounts appropriated by the legislature for

 5-6     the program.

 5-7           (b)  The program is funded through the smart jobs fund.

 5-8           (c)  Money in the smart jobs fund may be used for program

 5-9     administration, marketing expenses, and evaluation of the program.

5-10     These costs of the department in any fiscal year may not exceed

5-11     five percent of the total amount appropriated for the program for

5-12     [funds deposited in the smart jobs fund in] that year.

5-13           (d)  If, during any three consecutive months, the balance in

5-14     the smart jobs fund exceeds 0.15 percent of the total taxable wages

5-15     for the four calendar quarters ending the preceding June 30, as

5-16     computed under Section 204.062(c), Labor Code [7(c)(8), Texas

5-17     Unemployment Compensation Act (Article 5221b-5, Vernon's Texas

5-18     Civil Statutes)], the executive director shall immediately transfer

5-19     the excess to the Unemployment Compensation Fund created under

5-20     Section 203.021, Labor Code [9(a), Texas Unemployment Compensation

5-21     Act (Article 5221b-7, Vernon's Texas Civil Statutes)].

5-22           SECTION 3.  Section 481.155, Government Code, is amended to

5-23     read as follows:

5-24           Sec. 481.155.  Grants.  (a)  The executive director may award

5-25     grants for projects that meet the requirements of this chapter.  It

5-26     is the intent of the legislature that, to the greatest extent

5-27     practicable, money from the smart jobs fund shall be spent in all

 6-1     areas of the state.  The executive director may award a grant or a

 6-2     combination of grants in any fiscal year to a single employer in

 6-3     excess of $1,000,000 or at a rate greater than 10 percent of the

 6-4     annual wages of the new or existing job being created or retained

 6-5     with the grant only if:

 6-6                 (1)  the employer locates or expands in an enterprise

 6-7     zone;

 6-8                 (2)  the employer locates or expands in an adversely

 6-9     affected defense-dependent community;

6-10                 (3)  the employer locates or expands in an area having

6-11     an unemployment rate 1-1/2 times greater than the statewide average

6-12     at the time of the application;

6-13                 (4)  the employer locates or expands in a county with a

6-14     population of less than 75,000;

6-15                 (5)  at least 25 percent of the employees hired or

6-16     retained by the employer are economically disadvantaged individuals

6-17     as defined by Section 2303.402(c), Government Code; or

6-18                 (6)  the employer is a small business or a

6-19     micro-business.

6-20           (b)  The executive director shall attempt to ensure that at

6-21     least 20 percent of the total dollar amount of grants awarded under

6-22     the program are awarded to minority employers.

6-23           (c) [(b)]  The program is job-driven.  A grant may not be

6-24     awarded unless each employer participating in the project certifies

6-25     that:

6-26                 (1)  a job or job opening exists or will exist at the

6-27     end of the project for which the grant is sought; and

 7-1                 (2)  the job or job opening will be filled by a

 7-2     participant in the project.

 7-3           (d) [(c)]  A grant may not be awarded for a project under

 7-4     this section unless each employer participating in the project

 7-5     certifies that the starting wage for a new job created through the

 7-6     project will be equal to or greater than the prevailing wage for

 7-7     that occupation in the local labor market area [greater than 66 2/3

 7-8     percent of the state average weekly wage] and that the wage for a

 7-9     job existing on the date that the project is scheduled to begin

7-10     will be increased to the greater of:

7-11                 (1)  three [10] percent for a small business or five

7-12     percent for a business that is not a small business over the wage

7-13     in effect on the day before the date on which the project is

7-14     scheduled to begin for that job; or

7-15                 (2)  100 percent of the prevailing wage for that

7-16     occupation in the local labor market area [75 percent of the state

7-17     average weekly wage].

7-18           (e) [(d)]  An employer may apply for a grant under this

7-19     chapter, and an employer who is a micro-business may request a

7-20     modification of the requirements provided by Subsection (d) and

7-21     Section 481.159(c), if:

7-22                 (1)  the employer is required to reduce or eliminate

7-23     the employer's work force because of reductions in overall

7-24     employment within an industry;

7-25                 (2)  [or]  a substantial change in the skills required

7-26     to continue the employer's business exists because of technological

7-27     changes; or

 8-1                 (3)  other reasonable factors, as determined by [.  In

 8-2     awarding a grant under this subsection,] the executive director,

 8-3     exist [may modify the requirements of Subsection (c)].

 8-4           (f)  Grants awarded under this section [subsection] for which

 8-5     the executive director has modified the requirements of Subsection

 8-6     (d) [(c)] may not, in any fiscal year, exceed 10 percent of the

 8-7     total dollar amount of grants awarded under the program in that

 8-8     year.

 8-9           (g) [(e)]  Unless modified by the executive director under

8-10     rules adopted by the policy board, a grant may not be awarded for a

8-11     project unless each employer participating in the project certifies

8-12     that it will continue to spend on nonmanagerial training an amount

8-13     from private sources equal to the average amount spent by that

8-14     employer on such training for the most recent two-year period.

8-15           (h) [(f)]  A grant may not be awarded for a project if the

8-16     project will impair existing contracts for services or collective

8-17     bargaining agreements, except that a project inconsistent with the

8-18     terms of a collective bargaining agreement may be undertaken with

8-19     the written concurrence of the collective bargaining unit and the

8-20     employer or employers who are parties to the agreement.

8-21           (i) [(g)]  During each state fiscal year the executive

8-22     director shall attempt to ensure that at least 50 percent of the

8-23     total dollar amount of grants awarded under this section is awarded

8-24     to small businesses, as defined by Section 481.101.

8-25           (j) [(h)]  In awarding a grant under this section, the

8-26     executive director shall give priority to a project that is located

8-27     in an enterprise zone as defined by Section 2303.003.

 9-1           SECTION 4.  Section 481.156(a), Government Code, is amended

 9-2     to read as follows:

 9-3           (a)  The following may apply for a grant under this

 9-4     subchapter:

 9-5                 (1)  one or more employers to secure training for

 9-6     demand occupations, emerging occupations, or manufacturing

 9-7     occupations [in a particular industry];

 9-8                 (2)  one or more employers acting in partnership with

 9-9     an employer organization, labor organization, or community-based

9-10     organization to secure training for demand occupations, emerging

9-11     occupations, or manufacturing occupations [in a particular

9-12     industry]; or

9-13                 (3)  one or more employers acting in partnership with a

9-14     consortium composed of [one or] more than one provider [providers]

9-15     to secure training for demand occupations, emerging occupations, or

9-16     manufacturing occupations [in a particular industry].

9-17           SECTION 5.  Section 481.159(c), Government Code, is amended

9-18     to read as follows:

9-19           (c)  Each contract must provide a schedule for payment of

9-20     smart jobs fund money.  Twenty-five percent of allowable

9-21     expenditures [the grant award] shall be withheld by the department

9-22     for 90 days after  the date of completion of the contract

9-23     [project].  If at least 85 percent [all] of the trainees in the

9-24     project have been retained in  employment for that 90-day period

9-25     and have successfully achieved the skills and competencies, wage

9-26     requirements, and other contractual obligations, the amount of

9-27     allowable expenditures [the grant award] withheld shall be remitted

 10-1    to the employer.  [For each trainee who is not retained in

 10-2    employment for that 90-day period, the amount withheld shall be

 10-3    reduced by the amount of the training costs for that trainee that

 10-4    is derived from grant money, and any balance shall be remitted to

 10-5    the employer.]  If there is a negative balance, the employer is

 10-6    liable for the amount of the negative balance and shall remit that

 10-7    amount to the department not later than the 30th day after the date

 10-8    on which the employer is notified of the negative balance by the

 10-9    department.

10-10          SECTION 6.  Section 481.160(b), Government Code, is amended

10-11    to read as follows:

10-12          (b)  The annual report must include for that fiscal year:

10-13                (1)  the number of employers receiving grants under the

10-14    program;

10-15                (2)  the total amount of grants awarded;

10-16                (3)  the value, expressed in dollars and as a

10-17    percentage of total training expenditures, of matching

10-18    contributions made by employers;

10-19                (4)  the number of small businesses, as defined by

10-20    Section 481.101(3), that receive grants under the program and the

10-21    total amount of the grants awarded to those businesses;

10-22                (5)  the number of businesses located in enterprise

10-23    zones, as that term is defined by Chapter 2303, that receive grants

10-24    under the program and the total amount of the grants awarded to

10-25    those businesses;

10-26                (6)  the geographical distribution of employers

10-27    receiving grants under the program;

 11-1                (7)  the total number of jobs created, enhanced, or

 11-2    retained under the program, reported by region of the state and by

 11-3    occupation;

 11-4                (8)  the wage levels of trainees entering or returning

 11-5    to the work force, broken down by current employees undergoing

 11-6    retraining and new hires, at three months and[,] one year[, and

 11-7    three years] after the conclusion of their training;

 11-8                (9)  the number and percentage of participating

 11-9    employers that provide workers' compensation insurance coverage and

11-10    the number and percentage of employees covered;

11-11                (10)  the number and percentage of participating

11-12    employers that offer health care insurance coverage and the number

11-13    and percentage of employees covered;

11-14                (11)  the number and percentage of women employers and

11-15    minority employers receiving grants under the program and the total

11-16    amount of the grants awarded, broken out by group;

11-17                (12)  the number and percentage of women, minority

11-18    group members, and disabled individuals participating as trainees

11-19    in training projects, broken out by group; and

11-20                (13)  the number and percentage of women private

11-21    providers and private providers who are minority group members

11-22    utilized by employers in training projects, broken out by group.

11-23          SECTION 7.  This Act takes effect September 1, 1997.

11-24          SECTION 8.  The importance of this legislation and the

11-25    crowded condition of the calendars in both houses create an

11-26    emergency and an imperative public necessity that the

11-27    constitutional rule requiring bills to be read on three several

 12-1    days in each house be suspended, and this rule is hereby suspended.