HBA-RBT H.B. 1079 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1079 By: Keffer Economic Development 3/24/1999 Introduced BACKGROUND AND PURPOSE The legislature created the Smart Jobs Program (program) in 1993. H.B. 1079 revises the program by clarifying the its goals, setting aside funds for longitudinal research, allocating program funds to businesses based on the number of persons they employ, simplifying the application review and grant award processes, and making application information confidential. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the governing board of the Texas Department of Economic Development in SECTION 3 (Section 481.1525, Government Code), and it is the opinion of the Office of House Bill Analysis that rulemaking authority previously delegated to the policy board has been delegated to the governing board of the Texas Department of Economic Development in SECTION 8 (Section 481.157, Government Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 481.151, Government Code, to delete the definitions of "business development," "demand occupation," "emerging occupation," "family wage job," "manufacturing occupation," "state average weekly wage," and "targeted industry." Defines "large business" and "medium business." Redefines "micro business" and "small business." Redesignates Subsections (4)-(7), (9)-(10), (12)-(18), (21)-(22), to (1)-(4), (5)-(6), (9)-(15), (16)-(17). SECTION 2. Amends Section 481.152, Government Code, to delete a provision that requires the smart jobs fund program to give priority to the creation and retention of family wage jobs and focus on employers in industries that promote high-skill, high-wage jobs in high technology areas and on demand occupations that provide those jobs. Redesignates Subsections (c) and (d) to (b) and (c). SECTION 3. Amends Subchapter J, Chapter 481, Government Code, by adding Section 481.1525, as follows: Sec. 481.1525. PROGRAM GOALS. Requires the smart jobs fund program (program) to emphasize the creation and retention of high-skill, high-wage jobs and occupations that provide those jobs. Requires the program to specifically give priority to high impact economic development projects and job training designed to improve the competitiveness of businesses in this state. Requires the governing board, by rule, to define the requirements for a high impact development project and to determine the percentage of the smart jobs fund that may be allocated to those projects and to the retention of existing jobs. Requires the governing board to determine appropriate means to accomplish the goals of the program. Authorizes the governing board to work in conjunction with the Texas Workforce Commission and the comptroller in implementing those goals. SECTION 4. Amends Section 481.154(c), Government Code, to require the department to use money from the smart jobs fund, in a percentage set by the governing board of the Texas Department of Economic Development (governing board), to monitor the subsequent employment experiences of persons who participate in the program as trainees in order to evaluate the long-range effect of the program. Requires the Texas Workforce Commission to cooperate with the Texas Department of Economic Development (department) in implementing this subsection. SECTION 5. Amends Section 481.155, Government Code, to require that grants from the fund be awarded to micro businesses, small businesses, medium businesses, and large businesses in a manner proportionate to the number of persons employed by those categories of businesses. Requires the department to use labor market information maintained by the Texas Workforce Commission to identify the size of a business. Authorizes the executive director to award a grant in excess of $250,000, rather than $1,500,000, under specified conditions. Requires the executive director to attempt to ensure that at least 20 percent of the total dollar amount of grants awarded to micro businesses, small business, medium businesses, and large businesses are awarded to minority employers. Requires the governing board to make the final decision on grant applications involving a high impact development project or which request an award of at least $1,000,000. Redesignates existing Subsections (b), (c)-(h), and (j), to (c), (e)-(j), and (k), respectively. Deletes existing Subsection (i). Makes conforming and nonsubstantive changes. SECTION 6. Amends Section 481.156, Government Code, as follows: Sec. 481.156. New title: GRANT APPLICATION; AWARDING OF GRANTS. Requires the executive director to establish multiple application review and grant award tracks as provided by this section. Authorizes the department to award grants to specified employers. Provides that a grant application must comply with requirements adopted under this subchapter and any rules adopted by the governing board. Requires the executive director to establish a quarterly, competitive application process for grant applications submitted by large businesses or those requesting an award of more than $250,000. Requires the governing board to ensure that the complexity of the application process appropriately corresponds to the size of the business and the amount of funds awarded under the grant. Requires the executive director to establish a simplified application process for grant applications from small businesses and micro businesses and ensure that the application process for small businesses and micro businesses is open and ongoing. Authorizes the department to provide assistance with the application process to applicants who are large businesses or medium businesses, and requires the department to assist small businesses or micro businesses. Requires the department to simplify the review process for grant applications. Makes conforming and nonsubstantive changes. SECTION 7. Amends Subchapter J, Chapter 481, Government Code, by adding Section 481.1565, as follows: Sec. 481.1565. CONFIDENTIALITY REQUIREMENTS. Provides that information provided by an applicant in a grant application is confidential information for purposes of Chapter 552, Government Code (Public Information), only as provided by this section. Provides that information contained in an application which is denied is confidential. Provides that information, other than financial information, provided by an applicant whose application is granted and who accepts an award is confidential information only if the information would otherwise be confidential under the terms of Chapter 552. Provides that financial information is confidential information for one year after the date on which the grant is awarded and, after that, only if the information would otherwise be confidential under the terms of Chapter 552. SECTION 8. Amends Section 481.157(b), Government Code, to authorize the governing board, rather than the policy board, to adopt rules modifying the requirements of Subsection (a) for employees who are small businesses or micro businesses, rather than businesses with fewer than 50 employees. SECTION 9. Amends Section 481.159(a) and (c), Government Code, to authorize the executive director or governing board to approve projects. Provides that trainees who leave the employment voluntarily are not to be included in the percentage of employees who are retained. Makes conforming and nonsubstantive changes. SECTION 10. Amends Section 481.160(b), Government Code, to provide that the annual report for each fiscal year must include the total number of grant applicants classified by micro businesses, small businesses, medium businesses, and large businesses. Redesignates existing Subdivisions (b)(1)-(13) to (b)(2)-(14), respectively. Makes conforming and nonsubstantive changes. SECTION 11. Amends Section 204.006(a), Labor Code, to make the alternate contribution rate 2.6 percent, rather than 2.7 percent. SECTION 12. Amends Section 204.062(a), Labor Code, by subtracting 0.1 from the amount of the replenishment tax computation. SECTION 13. Repealer: Sections 481.158, Government Code (Trainees), 481.161, Government Code (Expiration), 204.0065, Labor Code (Temporary Initial Contribution Rate), 204.0625, Labor Code (Temporary Adjustment to Replenishment Tax Rate), and 204.124, Labor Code (Expiration), are repealed. SECTION 14. Makes application of this Act prospective to January 1, 2000. SECTION 15. Effective date: September 1, 1999. SECTION 16. Emergency clause.