1-1 By: Oliveira (Senate Sponsor - Sibley) H.B. No. 1528
1-2 (In the Senate - Received from the House May 7, 1997;
1-3 May 8, 1997, read first time and referred to Committee on Economic
1-4 Development; May 18, 1997, reported adversely, with favorable
1-5 Committee Substitute by the following vote: Yeas 6, Nays 0;
1-6 May 18, 1997, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 1528 By: Sibley
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the smart jobs fund program.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Section 481.151, Government Code, is amended to
1-13 read as follows:
1-14 Sec. 481.151. DEFINITIONS. In this subchapter:
1-15 (1) "Business development" includes relocation,
1-16 expansion, turnover, diversification, or technological change.
1-17 (2) "Demand occupation" means an occupation in which,
1-18 as a result of business development, there are or will be positive
1-19 growth-to-replacement ratios within the next 12 to 24 months,
1-20 according to the best available sources of state and local labor
1-21 market information.
1-22 (3) "Emerging occupation" means an occupation that
1-23 arises from forces related to technological changes in the
1-24 workplace and the work of which cannot be performed by workers
1-25 from other occupations without at least two months of customized
1-26 education or training.
1-27 (4) "Employee" means an individual who performs
1-28 services for another under a contract of hire, whether express or
1-29 implied, or oral or written.
1-30 (5) [(4)] "Employer" means a person that employs one
1-31 or more employees.
1-32 (6) [(5)] "Executive director" means the executive
1-33 director of the department.
1-34 (7) [(6)] "Existing employer" means an employer that:
1-35 (A) has been liable to pay contributions under
1-36 Subtitle A, Title 4, Labor Code ([the] Texas Unemployment
1-37 Compensation Act) [(Article 5221b-1 et seq., Vernon's Texas Civil
1-38 Statutes)] for more than one year;
1-39 (B) has employees; and
1-40 (C) is in compliance with the reporting and
1-41 payment requirements of that Act, as determined by the Texas
1-42 Workforce [Employment] Commission.
1-43 (8) [(7)] "Family wage job" means a job that offers:
1-44 (A) wages equal to or greater than the state
1-45 average weekly wage;
1-46 (B) benefits, such as vacation leave, sick
1-47 leave, and insurance coverage;
1-48 (C) reasonable opportunities for continued skill
1-49 development and career path advancement; and
1-50 (D) a substantial likelihood of long-term job
1-51 security.
1-52 (9) [(8)] "In-kind contribution" means a noncash
1-53 contribution of goods and services provided by an employer as all
1-54 or part of the employer's matching share of a grant or project.
1-55 (10) [(9)] "Job" means employment on a basis
1-56 customarily considered full-time for the applicable occupation and
1-57 industry.
1-58 (11) "Manufacturing occupation" means an occupation
1-59 that is involved in the mechanical or chemical transformation of
1-60 materials or substances into new products.
1-61 (12) "Micro-business" means an eligible business with
1-62 not more than 20 employees.
1-63 (13) [(10)] "Minority employer" means a business
1-64 entity at least 51 percent of which is owned by minority group
2-1 members or, in the case of a corporation, at least 51 percent of
2-2 the shares of which are owned by minority group members and that:
2-3 (A) is managed and, in daily operations, is
2-4 controlled by minority group members; and
2-5 (B) is a domestic business entity with a home or
2-6 branch office located in this state and is not a branch or
2-7 subsidiary of a foreign corporation or other foreign business
2-8 entity.
2-9 (14) [(11)] "Minority group members" include:
2-10 (A) African-Americans;
2-11 (B) American Indians;
2-12 (C) Asian-Americans; [and]
2-13 (D) Mexican-Americans and other Americans of
2-14 Hispanic origin; and
2-15 (E) women.
2-16 (15) [(12)] "Program" means the smart jobs fund
2-17 program created under this subchapter.
2-18 (16) [(13)] "Project" means a specific employment
2-19 training project developed and implemented under this subchapter.
2-20 (17) [(14)] "Provider" means a person that provides
2-21 employment-related training. The term includes employers, employer
2-22 associations, labor organizations, community-based organizations,
2-23 training consultants, public and private schools, technical
2-24 institutes, junior or community colleges, senior colleges,
2-25 universities, and proprietary schools, as defined by Section
2-26 132.001, Education Code.
2-27 (18) "Small business" has the meaning assigned that
2-28 term by Section 481.101.
2-29 (19) [(15)] "State average weekly wage" means the
2-30 annual average of the average weekly wage of manufacturing
2-31 production workers in this state as of September 1 of each year, as
2-32 determined by the Texas Workforce [Employment] Commission [under
2-33 Section 3(b), Texas Unemployment Compensation Act (Article 5221b-1,
2-34 Vernon's Texas Civil Statutes)], adjusted for regional variances.
2-35 (20) [(16)] "Targeted industry" means an industry that
2-36 promotes high-skill, high-wage jobs using Texas-available material
2-37 and human resources, as determined by the department.
2-38 (21) [(17)] "Trainee" means a participant in a project
2-39 funded under this subchapter.
2-40 (22) [(18)] "Wages" means all forms of compensation or
2-41 remuneration, excluding benefits, payable for a specific period to
2-42 an employee for personal services rendered by that employee.
2-43 SECTION 2. Section 481.154, Government Code, is amended to
2-44 read as follows:
2-45 Sec. 481.154. FUNDING. (a) The smart jobs fund is
2-46 established as a special trust fund in the custody of the state
2-47 treasurer separate and apart from all public money or funds of this
2-48 state. The fund is composed of:
2-49 (1) money transferred into the fund under Section
2-50 204.123, Labor Code [9e, Texas Unemployment Compensation Act
2-51 (Article 5221b-1 et seq., Vernon's Texas Civil Statutes)];
2-52 (2) gifts, grants, and other donations received by the
2-53 department for the fund; and
2-54 (3) any amounts appropriated by the legislature for
2-55 the program.
2-56 (b) The program is funded through the smart jobs fund.
2-57 (c) Money in the smart jobs fund may be used for program
2-58 administration, marketing expenses, and evaluation of the program.
2-59 These costs of the department in any fiscal year may not exceed
2-60 five percent of the total amount appropriated for the program for
2-61 [funds deposited in the smart jobs fund in] that year.
2-62 (d) If, during any three consecutive months, the balance in
2-63 the smart jobs fund exceeds 0.15 percent of the total taxable wages
2-64 for the four calendar quarters ending the preceding June 30, as
2-65 computed under Section 204.062(c), Labor Code [7(c)(8), Texas
2-66 Unemployment Compensation Act (Article 5221b-5, Vernon's Texas
2-67 Civil Statutes)], the executive director shall immediately transfer
2-68 the excess to the Unemployment Compensation Fund created under
2-69 Section 203.021, Labor Code [9(a), Texas Unemployment Compensation
3-1 Act (Article 5221b-7, Vernon's Texas Civil Statutes)].
3-2 SECTION 3. Section 481.155, Government Code, is amended to
3-3 read as follows:
3-4 Sec. 481.155. Grants. (a) The executive director may award
3-5 grants for projects that meet the requirements of this chapter. It
3-6 is the intent of the legislature that, to the greatest extent
3-7 practicable, money from the smart jobs fund shall be spent in all
3-8 areas of the state. The executive director may award a grant or a
3-9 combination of grants in any fiscal year to a single employer in
3-10 excess of $1,500,000 or at a rate greater than 10 percent of the
3-11 annual wages of the new or existing job being created or retained
3-12 with the grant only if:
3-13 (1) the employer locates or expands in an enterprise
3-14 zone;
3-15 (2) the employer locates or expands in an adversely
3-16 affected defense-dependent community;
3-17 (3) the employer locates or expands in an area having
3-18 an unemployment rate 1-1/2 times greater than the statewide average
3-19 at the time of the application;
3-20 (4) the employer locates or expands in a county with a
3-21 population of less than 75,000;
3-22 (5) at least 25 percent of the employees hired or
3-23 retained by the employer are economically disadvantaged individuals
3-24 as defined by Section 2303.402(c), Government Code; or
3-25 (6) the employer is a small business or a
3-26 micro-business.
3-27 (b) The executive director shall attempt to ensure that at
3-28 least 20 percent of the total dollar amount of grants awarded under
3-29 the program are awarded to minority employers.
3-30 (c) [(b)] The program is job-driven. A grant may not be
3-31 awarded unless each employer participating in the project certifies
3-32 that:
3-33 (1) a job or job opening exists or will exist at the
3-34 end of the project for which the grant is sought; and
3-35 (2) the job or job opening will be filled by a
3-36 participant in the project.
3-37 (d) [(c)] A grant may not be awarded for a project under
3-38 this section unless each employer participating in the project
3-39 certifies that the starting wage for a new job created through the
3-40 project will be equal to or greater than the prevailing wage for
3-41 that occupation in the local labor market area [greater than 66 2/3
3-42 percent of the state average weekly wage] and that the wage for a
3-43 job existing on the date that the project is scheduled to begin
3-44 will be increased to the greater of:
3-45 (1) three [10] percent for a small business or five
3-46 percent for a business that is not a small business over the wage
3-47 in effect on the day before the date on which the project is
3-48 scheduled to begin for that job; or
3-49 (2) 100 percent of the prevailing wage for that
3-50 occupation in the local labor market area [75 percent of the state
3-51 average weekly wage].
3-52 (e) [(d)] An employer may apply for a grant under this
3-53 chapter, and an employer who is a micro-business may request a
3-54 modification of the requirements provided by Subsection (d) and
3-55 Section 481.159(c), if:
3-56 (1) the employer is required to reduce or eliminate
3-57 the employer's work force because of reductions in overall
3-58 employment within an industry;
3-59 (2) [or] a substantial change in the skills required
3-60 to continue the employer's business exists because of technological
3-61 changes; or
3-62 (3) other reasonable factors, as determined by [. In
3-63 awarding a grant under this subsection,] the executive director,
3-64 exist [may modify the requirements of Subsection (c)].
3-65 (f) Grants awarded under this section [subsection] for which
3-66 the executive director has modified the requirements of Subsection
3-67 (d) [(c)] may not, in any fiscal year, exceed 10 percent of the
3-68 total dollar amount of grants awarded under the program in that
3-69 year.
4-1 (g) [(e)] Unless modified by the executive director under
4-2 rules adopted by the policy board, a grant may not be awarded for a
4-3 project unless each employer participating in the project certifies
4-4 that it will continue to spend on nonmanagerial training an amount
4-5 from private sources equal to the average amount spent by that
4-6 employer on such training for the most recent two-year period.
4-7 (h) [(f)] A grant may not be awarded for a project if the
4-8 project will impair existing contracts for services or collective
4-9 bargaining agreements, except that a project inconsistent with the
4-10 terms of a collective bargaining agreement may be undertaken with
4-11 the written concurrence of the collective bargaining unit and the
4-12 employer or employers who are parties to the agreement.
4-13 (i) [(g)] During each state fiscal year the executive
4-14 director shall attempt to ensure that at least 50 percent of the
4-15 total dollar amount of grants awarded under this section is awarded
4-16 to small businesses, as defined by Section 481.101.
4-17 (j) [(h)] In awarding a grant under this section, the
4-18 executive director shall give priority to a project that is located
4-19 in an enterprise zone as defined by Section 2303.003.
4-20 SECTION 4. Section 481.156(a), Government Code, is amended
4-21 to read as follows:
4-22 (a) The following may apply for a grant under this
4-23 subchapter:
4-24 (1) one or more employers to secure training for
4-25 demand occupations, emerging occupations, or manufacturing
4-26 occupations [in a particular industry];
4-27 (2) one or more employers acting in partnership with
4-28 an employer organization, labor organization, or community-based
4-29 organization to secure training for demand occupations, emerging
4-30 occupations, or manufacturing occupations [in a particular
4-31 industry]; or
4-32 (3) one or more employers acting in partnership with a
4-33 consortium composed of [one or] more than one provider [providers]
4-34 to secure training for demand occupations, emerging occupations, or
4-35 manufacturing occupations [in a particular industry].
4-36 SECTION 5. Sections (b) and (c) of 481.159, Government Code,
4-37 is amended to read as follows:
4-38 (b) Reimbursable costs in the contract may include only
4-39 those expenses related to direct training in job-related basic
4-40 skills, including literacy skills, job-related vocational skills,
4-41 and administrative costs. Total administrative costs for any
4-42 single employer [particular] project may not exceed 10 percent of
4-43 the project's expenditures. Total administrative costs for a
4-44 consortium project may not exceed 15% of the project's
4-45 expenditures.
4-46 (c) Each contract must provide a schedule for payment of
4-47 smart jobs fund money. Twenty-five percent of allowable
4-48 expenditures [the grant award] shall be withheld by the department
4-49 for 90 days after the date of completion of the contract
4-50 [project]. If at least 85 percent [all] of the trainees in the
4-51 project have been retained in employment for that 90-day period
4-52 and have successfully achieved the skills and competencies, wage
4-53 requirements, and other contractual obligations, the amount of
4-54 allowable expenditures [the grant award] withheld shall be remitted
4-55 to the employer. [For each trainee who is not retained in
4-56 employment for that 90-day period, the amount withheld shall be
4-57 reduced by the amount of the training costs for that trainee that
4-58 is derived from grant money, and any balance shall be remitted to
4-59 the employer.] If there is a negative balance, the employer is
4-60 liable for the amount of the negative balance and shall remit that
4-61 amount to the department not later than the 30th day after the date
4-62 on which the employer is notified of the negative balance by the
4-63 department.
4-64 SECTION 6. Section 481.160(b), Government Code, is amended
4-65 to read as follows:
4-66 (b) The annual report must include for that fiscal year:
4-67 (1) the number of employers receiving grants under the
4-68 program;
4-69 (2) the total amount of grants awarded;
5-1 (3) the value, expressed in dollars and as a
5-2 percentage of total training expenditures, of matching
5-3 contributions made by employers;
5-4 (4) the number of small businesses, as defined by
5-5 Section 481.101(3), that receive grants under the program and the
5-6 total amount of the grants awarded to those businesses;
5-7 (5) the number of businesses located in enterprise
5-8 zones, as that term is defined by Chapter 2303, that receive grants
5-9 under the program and the total amount of the grants awarded to
5-10 those businesses;
5-11 (6) the geographical distribution of employers
5-12 receiving grants under the program;
5-13 (7) the total number of jobs created, enhanced, or
5-14 retained under the program, reported by region of the state and by
5-15 occupation;
5-16 (8) the wage levels of trainees entering or returning
5-17 to the work force, broken down by current employees undergoing
5-18 retraining and new hires, at three months and[,] one year[, and
5-19 three years] after the conclusion of their training;
5-20 (9) the number and percentage of participating
5-21 employers that provide workers' compensation insurance coverage and
5-22 the number and percentage of employees covered;
5-23 (10) the number and percentage of participating
5-24 employers that offer health care insurance coverage and the number
5-25 and percentage of employees covered;
5-26 (11) the number and percentage of women employers and
5-27 minority employers receiving grants under the program and the total
5-28 amount of the grants awarded, broken out by group;
5-29 (12) the number and percentage of women, minority
5-30 group members, and disabled individuals participating as trainees
5-31 in training projects, broken out by group; and
5-32 (13) the number and percentage of women private
5-33 providers and private providers who are minority group members
5-34 utilized by employers in training projects, broken out by group.
5-35 SECTION 7. This Act takes effect September 1, 1997.
5-36 SECTION 8. The importance of this legislation and the
5-37 crowded condition of the calendars in both houses create an
5-38 emergency and an imperative public necessity that the
5-39 constitutional rule requiring bills to be read on three several
5-40 days in each house be suspended, and this rule is hereby suspended.
5-41 * * * * *