HBA-MPA C.S.H.B. 3657 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 3657 By: Oliveira Economic Development 4/7/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, the smart jobs fund provides grants to employers for customized training. In fiscal year 1998, smart jobs grants totaled nearly $55 million to train workers for almost 43,000 existing jobs. Key factors in establishing the grants are the companies' qualifications as established businesses and first-time grantees offering major employee benefits and technical skills training. Under the program, the business provides a 10 percent match to grants in participant's wages, benefits, and facilities during the training period. C.S.H.B. 3657 establishes a rainy day fund to address situations of severe economic dislocation within the state, directs new funding to the skills development fund, and provides a financial cushion to fund the smart jobs program. This bill also calls for a performance evaluation to assess the success of the smart jobs program, modifies the information included in the annual report, and provides that information in a grant application is 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 smart jobs fund program in SECTION 1.02 (Section 481.152, Government Code) and to the Texas Workforce Commission in SECTION 1.04 (Section 481.154, Government Code)of this bill, and the rulemaking authority previously delegated to the policy board is transferred to the governing board of the smart jobs fund program in SECTION 1.03 (Section 481.153, Government Code) and in SECTION 1.08 (Section 481.157, Government Code) of this bill. SECTION BY SECTION ANALYSIS ARTICLE 1. SMART JOBS FUND PROGRAM. SECTION 1.01. Amends Section 481.151, Government Code, to add definitions for "county average weekly wage," "group health benefit plan," "high impact development project," "large business," "medium business," and "minimally qualified job." Redefines "existing employer," "microbusiness," and "small business," and deletes definitions for "demand occupation," "emerging occupation," "family-wage job," "manufacturing occupation," "state average weekly wage," and "targeted industry." SECTION 1.02. Amends Section 481.152, Government Code, as follows: Sec. 481.152. New title: SMART JOBS FUND PROGRAM; PURPOSE; ADMINISTRATION. Adds PURPOSE. (a) Provides that the smart jobs program (program) is created to enhance employment opportunities for residents of this state and to increase the job skills of the existing workforce by providing job training assistance to business operating or relocating to, rather than meet the needs of existing and new industries in, this state. (b) Requires the program to award grants for the creation and retention of jobs in targeted industries that pay more than the county average weekly wage and are covered by a group health benefit plans for which the business pays at least 80 percent of the premiums or other charges assessed for employee-only coverage under the plan, rather than focus on employers in industries that promote high skill, high wage jobs in technology areas and on demand occupations that provide those jobs. Makes conforming and nonsubstantive changes. (c) Requires the program to specifically give priority to high impact development projects, and job training designed to improve the skills of the existing work force in this state. (d) Requires the governing board of the smart jobs fund program to develop and adopt by rule a scoring system that evaluates the economic impact of grant applications and reflect the criteria set forth in this subchapter. Requires the executive director and the governing board to use the scoring system and a competitive process to award grants. Sets forth the legislative intent. (e) Requires at least 70 percent of the money spent under this program to be used for projects that assist existing employers located in this state by training and retraining workers. Requires the balance of the money to be spent for high impact development projects. (f) 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, as necessary to implement those goals. (g) Redesignated from existing Subsection (c). (h) Redesignated from existing Subsection (d). (i) Requires the Texas Department of Economic Development (department) to use the uniform service regions established by the comptroller under Section 120 (Uniform Service Regions), Article V, Chapter 19, Acts of the 72nd Legislature, 1st Called Session, 1991, to implement provisions regarding classification of the state into regions. SECTION 1.03. Amends Section 481.153, Government Code, to substitutes "governing" for "policy" as the name of the board required to adopt rules to implement to program. SECTION 1.04. Amends Section 481.154, Government Code, by amending the heading and Subsections (a) and (c), and adding Subsections (d), (e), (f), (g), and (h), as follows: Sec. 481.154. New title: FUNDING; RAINY DAY FUND. Adds RAINY DAY FUND. (a) Provides that the smart jobs fund is established and is composed of any amounts appropriated by the legislature for the program from the general revenue fund, and other enumerated sources. (b) Makes no change. (c) Prohibits the administrative, marketing, and evaluation costs of the department from exceeding in any single year the lesser of five percent of the total amount appropriated for the program in that fiscal year or $1.5 million. (d) Provides that the smart jobs rainy day fund (RD-fund) is established as a special trust in the custody of the comptroller separate from all public money or funds of this state. Provides that the RD-fund is composed of money transferred to the RD-fund as provided by Section 204.123 (Transfer to Smart Jobs Fund and Compensation Fund), Labor Code, money returned by employers or recouped by the program under Section 481.159(d) (Contracts), and any other money received by the governing board for deposit in the RDfund. (e) Authorizes the governing board to authorize the executive director of the program (director) to use money in the RD-fund if it determines, after consulting with the comptroller, that the smart jobs fund is insufficient to cover the legislature's appropriation to operate the program, and the Texas Workforce Commission (commission) has determined that the unemployment rate in this state is 125 percent of the average rate during the previous three years, or a severe economic dislocation is occurring in a specific region of this state. (f) Requires the commission by rule to define "severe economic dislocation." Requires the commission to consider employment-related factors including the number of jobs lost in the region compared to the region's usual employment rate, and massive layoffs in a region of this state caused by the closure of military bases, the effect of the implementation of the North American Free Trade Agreement, employer relocation, or other analogous situations. (g) Authorizes the director to use the money allocated from the RD-fund solely for projects located in the affected region, if the governing board approves use of money from the RD-fund because of severe economic dislocation in a specific region. (h) Prohibits the total combined amount spent in any fiscal year from exceeding the amount appropriated by the legislature for the operation of the program. (i) Makes conforming and nonsubstantive changes. SECTION 1.05. Amends Section 481.155, Government Code, as follows: Sec. 481.155. GRANTS. (a)Authorizes the director and the governing board to award the grants for projects that meet the requirements of this chapter. Deletes provision describing the legislative intent that the smart jobs fund be spent in all parts of the state, and conditions under which the director may award grants to a single employer in excess of $1,500,000 or at a rate greater than 10 percent of the annual wages of new or existing jobs created or retained. (b) Requires the governing board to make the final decision for a grant application regarding a high impact development project, or requesting an award of at least $250,000. Deletes existing text requiring the executive director to award 20 percent of grant to minority employers (c) Makes a nonsubstantive change. (d) Prohibits a grant from being awarded unless each employer participating in the project certifies that each job is covered by a group health benefit plan for which the business pays at least 80 percent of the premiums or other charges assessed for employee-only coverage under the plan. (e) Prohibits a grant from being awarded under this section unless a three percent wage increase is provided by micro-business and small business or a five percent increase for those businesses which are not in that classification, or each employer certifies that the starting wage will be equal or greater than the county average weekly wage for the county in which the job or project is located, rather than the prevailing wage for that occupation in the local labor market area. Makes conforming and nonsubstantive changes. Redesignated from existing Subsection (d). (f) Authorizes an employer to request a modification of the requirements provided by Subsection (e) and Section 481.159(c), if reasonable factors exist for the modification, as determined by the executive director. Deletes conditions having to do with employers reducing the workforce because of overall employment in the industry, and because technological changes require substantial change in the skills required. Makes conforming and nonsubstantive changes. Redesignated from existing Subsection (e). Redesignates existing Subsections (f)-(h), as (g)-(i). Deletes existing Subsections (i) and (j), which require the executive director to ensure that 50 percent of total grants are awarded to small business, and that priority is given to projects in an enterprise zone. SECTION 1.06. Amends Section 481.156, Government Code, as follows: Sec. 481.156. New title: GRANT APPLICATION; AWARDING OF GRANTS. (a) Authorizes an employer to apply for a grant under this subchapter. Requires the executive director to establish multiple application review and grant award tracks. (b) Authorizes the department to award grants to specified employers. Makes conforming changes. Creates this subsection from new and existing text. (c) Provides that applications submitted by medium and large businesses must include a complete business and training plan, including specified information. Redesignated from existing Subsection (b). (d) Requires the director to establish a quarterly competitive application process for grant applications submitted by medium and large businesses, or requesting a grant over $250,000. (e) Requires the governing board to ensure the complexity of the application process corresponds to the size of the business and the amount of the grant awarded. Requires the executive director to establish a simplified application process for small and microbusinesses and ensure that it is an open and ongoing process. (f) Authorizes the department to provide assistance with the application process to all applicants and requires it to give priority to assisting small and micro-businesses. Makes nonsubstantive change. Redesignated from existing Subsection (c). (g) Requires the department to simplify as much as possible the review process for grant applications, and minimize the length of the form. (h) Requires the department to notify the applicant as to whether the application is complete no later than the fifth business day after the application is received by the department. Requires the director to act on a completed application requesting an award of less than $250,000 no later than 30 days after the department notifies the applicant that the application is complete. Makes a nonsubstantive change. Redesignated from existing Subsection (e). SECTION 1.07. Amends Subchapter J, Chapter 481, Government Code, by adding Section 481.1565, as follows: Sec. 481.1565. CONFIDENTIALITY REQUIREMENTS. (a) Provides that information provided by an applicant in a grant application is confidential information for purposes of Chapter 552 (Public Information), Government Code, only as provided by this section. (b) Provides that information provided for an application that is denied is also confidential for purposes of Chapter 552. (c) Provides that information provided by an applicant whose application is granted and who accepts the grant is confidential information for purposes of Chapter 552 only if it was confidential otherwise under that chapter. SECTION 1.08. Amends Section 481.157(b), Government Code, to authorize the governing, rather than policy, board to adopt rules modifying the matching requirements of this section for employers that are small and micro-businesses, rather than employers with fewer than 50 employees. SECTION 1.09. Amends Section 481.159, Government Code, as follows: Sec. 481.159. CONTRACTS. (a) Authorizes the executive director or governing board, as applicable, to approve any project that meets the requirements. Requires the department to enter into a contract with the applicant and each employer if a project is approved, rather than the executive director approves, and funds are available. (b) Makes no change. (c) Modifies the condition for the remittance of a withheld amount to an employer to provide that trainees who leave the employment voluntarily for better-paying jobs are not counted against the 85 percent who must be retained in employment for a 90-day period. (d) Provides that each contract must state the term of the grant award. Requires a recipient who does not use all money awarded under the grant for the prescribed purpose within the allotted time to reimburse the program by submitting the appropriate amount to the executive director no later than the 30th day after the expiration of the term of the grant award. Requires the executive director to remit money received under this section to the comptroller for deposit in the RD-fund. SECTION 1.10. Amends Section 481.160, Government Code, by amending Subsection (b) and adding Subsection (c), as follows: (b) Provides that the annual report must include for that fiscal year: (1) the total number of minimally qualified jobs under the program reported by region and as a percentage of the total; (2) the number of employers receiving grants under the program reported by region and as a percentage of the total (3) the total amount of grants awarded reported by region and as a percentage of the total; (4) the total of money awarded reported by region and as a percentage of the total; (5) a comparison of the total dollars awarded reported by region as a percentage of the state's population, civilian labor force, unemployed, and minimally qualified jobs; (6) redesignated from existing Subdivision (3); (7) the total number of grant applicants under the program classified by microbusiness, small business, medium business, and large business; (8) the number of businesses classified by micro-business, small business, medium business, and large business, rather than small businesses as defined by Section 481.101(3) (Definitions), that receive grants under the program reported by region and business size and as a percentage of the total for each of those classifications statewide; (9) the total amount of money awarded classified by micro-business, small business, medium business, and large business reported by region and business size and as a percentage of the total for each of those classifications statewide; deletes existing Subdivisions (5) and (6) concerning reporting on granst received within enterprise zones and the geographical distribution of employers receiving grants; (10) the total number of jobs created, enhanced, or retained under the program by region, by occupation, and whether attributable to relocation to this state by businesses including as a percentage of the total, or training and retraining of employees including as a percentage of the total; (11) redesignated from existing Subdivision (8). (12) redesignated from existing Subdivision (9). (13) redesignated from existing Subdivision (10). (14) the number and percentage of women, disabled persons, and minority group members receiving grants as employers, participating as trainees, or in the program as providers, broken out by group; and (15) a list of modifications granted under Section 481.155(f) (regarding modification of wage requirements), the name of the project of which it was granted, and the reason it was granted. Deletes existing Subdivisions (12) and (13) to make conforming and nonsubstantive changes. (c) Requires the department to include in the annual report, in addition to the information required by Subsection (b), the percentage of all unemployment insurance contributions paid by employers in each region during the previous calendar year. SECTION 1.11. Amends Subchapter J, Chapter 481, Government Code, by adding Section 481.1605, as follows: Sec. 481.1605. PERFORMANCE EVALUATION. (a) Requires the governing board to provide for the implementation of a biennial performance evaluation of the program, which must include: (1) an analysis of the wage levels of trainees one and three years after completion of the program; (2) information related to the number of trainees employed in the same occupation after one and three years; (3) a survey and analysis of program satisfaction from former grant recipients; (4) a description of the impact of the program on the state generally and on economically distressed areas in particular; and (5) any additional information determined by the governing board to be necessary to analyze the impact and performance of the program. (b) Authorizes the governing board to contract with the comptroller or another agency to perform the evaluation and submit requests for proposals to contract with private vendors to perform the evaluation. Authorizes the governing board to enter into contracts, memoranda of understanding, or interagency agreements to implement this section. (c) Requires the person performing the evaluation to analyze the efficiency of the program and the use of administrative funds by the program in performing the evaluation, (d) Requires the department, the commission, and the State Occupational Information Coordinating Committee to cooperate with the person performing the evaluation. (e) Requires the governing board to pay the costs of the evaluation from money authorized under Section 481.154(c) (permitting smart job fund money to be used for administrative purposes). Authorizes no additional funds to be spent on the performance evaluation. SECTION 1.12. Amends Section 481.161, Government Code, to provide that this subchapter (Business Development-Smart Jobs Fund Program) expires December 31, 2001, rather than 1999. ARTICLE 2. SKILLS DEVELOPMENT FUND SECTION 2.01. Amends Section 303.003(a), Labor Code, to provide that the skills development fund is composed of money transferred into the fund under Section 204.123, Labor Code, and any amount appropriated by the legislature for the purposes of this chapter from the general revenue fund. ARTICLE 3. CONFORMING AMENDMENTS. SECTION 3.01. Amends Section 204.0065, Labor Code, to make a conforming change. SECTION 3.02. Amends Section 204.0625, Labor Code, to make a conforming change. SECTION 3.03. Amends Section 204.123, Labor Code, as follows: Sec. 204.123. New title: TRANSFER TO SMART JOBS FUNDS, SKILLS DEVELOPMENT FUND, AND COMPENSATION FUND. (a) Requires the commission to transfer from the holding fund 50 percent of the amount in the holding fund to the smart jobs fund, 30 percent of the amount in the holding fund to the skills development fund, and 20 percent of the amount in the holding fund to the RD-fund. (b) Makes conforming and nonsubstantive changes. (c) Requires the commission to transfer, from the amount in the holding fund created under Section 204.122 (Holding Fund), Labor Code, 14 percent to the smart jobs fund, 66 percent to the skills development fund, and 20 percent to the RD-fund, if the commission determines on September 1, 1999, that the compensation fund exceeds 100 percent of its floor as computed under Section 204.061 (Ceiling and Floor of Compensation Fund), Labor Code. (d) Provides that Subsection (c) expires October 2, 1999. SECTION 3.04. Amends Section 204.124, Labor Code, to make a conforming change. ARTICLE 4. TRANSITION; EFFECTIVE DATE; EMERGENCY SECTION 4.01. Makes application of Section 481.155, Government Code, as amended by this Act prospective, beginning January 1, 2000. SECTION 4.02. Effective date: September 1, 1999. SECTION 4.03. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 3657 differs from the original bill by reformatting the entire bill by creating four new articles and redesignating all section headings accordingly. C.S.H.B. 3657 differs from the original bill in SECTION 1.01 (SECTION 1 in the original bill) by adding definitions for "group health benefit plan," "high impact development project," and "minimally qualified job," and deleting the definition for "business development" and "targeted industry." C.S.H.B. 3657 differs from the original bill in SECTION 1.02 (SECTION 2 in the original bill) by amending Section 481.152, Government Code, by adding the word "Purpose" to the title. The substitute specifies in Subsection (a) that the smart jobs fund program is created to enhance employment opportunities for residents of the state to increase the job skills of the existing work force by providing job training assistance to businesses operating in, or relocating to, this state, rather than to increase the competitiveness of the existing workforce in this state, as set out in the original bill. The substitute specifies in Subsection (b) that grants should be awarded for jobs which pay more than the county average weekly wage and provide group health benefit plans, and adds the provision that the business pays at least 80 percent of the premiums or other charges assessed for employee-only coverage under such a plan. The substitute adds new Subsections (c), (d), (e), (f), and (i), as follows: (c) Requires the program to specifically give priority to high impact development projects, and job training designed to improve the skills of the existing work force in this state. (d) Requires the governing board of the smart jobs fund program to develop and adopt by rule a scoring system that evaluates the economic impact of grant applications and reflect the criteria set forth in this subchapter. Requires the executive director and the governing board to use the scoring system and a competitive process to award grants. Sets forth the legislative intent. (e) Requires at least 70 percent of the money spent under this program to be used for projects that assist existing employers located in this state by training and retraining workers. Requires the balance of the money to be spent for high impact development projects. (f) 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, as necessary to implement those goals. (i) Requires the Texas Department of Economic Development (department) to use the uniform service regions established by the comptroller under Section 120 (Uniform Service Regions), Article V, Chapter 19, Acts of the 72nd Legislature, 1st Called Session, 1991, to implement provisions regarding classification of the state into regions. The substitute redesignates existing Subsections (c) and (d) to (g) and (h). SECTION 1.03 is redesignated from SECTION 3 of the original bill. C.S.H.B. 3657 differs from the original bill in SECTION 1.04 (SECTION 4 in the original bill) by amending Section 481.154, Government Code, by specifing that the smart jobs fund is composed of amounts appropriated by the legislature from the general revenue fund, and that administration, marketing, and evaluation costs may not exceed the lesser of five percent of the total appropriated or $1.5 million. C.S.H.B. 3657 differs from the original bill in SECTION 1.05 (SECTION 5 in the original bill) to amend Section 481.155, Government Code, in Subsection (a), by specifying that the governing board may award grants in addition to the executive director. The original bill requires the executive director to award grants through a competitive process and develop a scoring system to do so. This language is not included in the substitute, and existing language in the law setting forth legislative intent that smart jobs fund be, to the extent practicable, spent in all areas of the state is deleted in the substitute, but not in the original bill. The substitute deletes existing Subsection (b), requiring the executive director to award 20 percent of grant to minority employers, and adds a new Subsection (b), as follows: (b) Requires the governing board to make the final decision for a grant application regarding a high impact development project, or requesting an award of at least $250,000. The substitute deletes from existing law the statement "the program is job driven" in Subsection (c). A new Subsection (d) is added in the substitute as follows: (d) Prohibits a grant from being awarded unless each employer participating in the project certifies that each job is covered by a group health benefit plan for which the business pays at least 80 percent of the premiums or other changes assessed for employee-only coverage under the plan. The substitute redesignates existing Subsection (d) as new Subsection (e), and specifies a three percent wage increase to be provided by micro-business, in addition to small business, or a five percent increase for those businesses which are not in that classification. The substitute redesignates existing Subsection (e) as new Subsection (f), and deletes conditions having to do with employers reducing the workforce because of overall employment in the industry, or because technological changes require substantial change in the skills required. The substitute redesignates existing Subsections (f)-(h) as (g)-(i), and deletes existing Subsections (i) and (j), which require the executive director to ensure that 50 percent of total grants are awarded to small business, and that priority is given to projects in an enterprise zone. C.S.H.B. 3657 differs from the original bill in SECTION 1.06 (SECTION 6 in the original bill) by amending Section 481.156, Government Code, by adding "Awarding of Grants." to the title. The substitute in Subsection (a) requires the executive director to establish multiple application review and grant award tracks, creates a new Subsection (b) from existing text, and makes conforming changes. The substitute redesignates the existing Subsection (b) as new Subsection (c), and specifies that applications submitted by medium and large businesses must meet certain criteria. The substitute adds new Subsections (d) and (e), as follows: (d) Requires the director to establish a quarterly competitive application process for grant applications submitted by medium and large businesses, or requesting a grant over $250,000. (e) Requires the governing board to ensure the complexity of the application process corresponds to the size of the business and the amount of the grant awarded. Requires the executive director to establish a simplified application process for small and microbusinesses and ensure that it is an open and ongoing process. The substitute redesignates existing Subsection (c) as new Subsection (f), and authorizes the department to provide assistance with the application process and give priority to small and microbusinesses. The substitute redesignates existing Subsection (d) as new Subsection (g), and requires the department to simplify the review process for grant applications. The substitute redesignates existing Subsection (e) as (h), and requires the executive director to notify applicants requesting an award less than $250,000 within 30 days of receiving a complete application. C.S.H.B. 3657 differs from the original bill in SECTION 1.07, by adding a new Section 481.1565, as follows: Sec. 481.1565. CONFIDENTIALITY REQUIREMENTS. (a) Provides that information provided by an applicant in a grant application is confidential information for purposes of Chapter 552 (Public Information), Government Code, only as provided by this section. (b) Provides that information provided for an application that is denied is also confidential for purposes of Chapter 552. (c) Provides that information provided by an applicant whose application is granted and who accepts the grant is confidential information for purposes of Chapter 552 only if it was confidential otherwise under that chapter. C.S.H.B. 3657 differs from the original bill in SECTION 1.08 by amending Section 481.157(b), Government Code, to authorize the governing, rather than policy, board to adopt rules modifying the matching requirements of this section for employers that are small and micro-businesses, rather than employers with fewer than 50 employees. C.S.H.B. 3657 differs from the original bill in SECTION 1.09 (SECTION 7 in the original bill) by amending Section 481.159, in Subsection (a), to authorize the governing board, in addition to the executive director, to approve projects that meet the requirements in Subchapter J. The substitute in Subsection (c), qualifies the condition for the remittance of a withheld amount to an employer to provide that trainees who leave the employment voluntarily for better-paying jobs are not counted against the 85 percent who must be retained in employment for a 90-day period. C.S.H.B. 3657 differs from the original bill in SECTION 1.10 (SECTION 8 in the original bill) by amending Section 481.160, Government Code, by amending the list of information that must be included in the annual report by: _adding new subdivisions, as follows: (1) the total number of minimally qualified jobs under the program reported by region and as a percentage of the total; (4) the total of money awarded reported by region and as a percentage of the total; (5) a comparison of the total dollars awarded reported by region as a percentage of the state's population, civilian labor force, unemployed, and minimally qualified jobs; (7) the total number of grant applicants under the program classified by microbusiness, small business, medium business, and large business; and (15) a list of modifications granted under Section 481.155(f) (regarding modification of wage requirements), the name of the project for which it was granted, and the reason it was granted. _redesignating existing subdivisions, as follows: Subdivisions (3) as (6), (8) as (11), (9) as (12), and (10) as (13). _deleting existing Subdivisions (5) concerning reporting on grants received within enterprise zones, (6) concerning reporting on the geographical distribution of employers receiving grants, (12) and (13) to make conforming and nonsubstantive changes. _changing existing subdivisions, as follows: (2) the number of employers receiving grants under the program reported by region and as a percentage of the total (redesignates from existing Subdivision (1)); (3) the total amount of grants awarded reported by region and as a percentage of the total (redesignates from the existing Subdivision (2)); (8) the number of businesses classified by micro-business, small business, medium business, and large business, rather than small businesses as defined by Section 481.101(3) (Definitions), that receive grants under the program reported by region and business size and as a percentage of the total for each of those classifications statewide (redesignates from the existing Subdivision (4), which is divided into this and the following subdivision); (9) the total amount of money awarded classified by micro-business, small business, medium business, and large business reported by region and business size and as a percentage of the total for each of those classifications statewide; (10) the total number of jobs created, enhanced, or retained under the program by region, by occupation, and whether attributable to relocation to this state by businesses including as a percentage of the total, or training and retraining of employees including as a percentage of the total (redesignated from existing Subdivision (7)); and (14) the number and percentage of women, disabled persons, and minority group members receiving grants as employers, participating as trainees, or in the program as providers, broken out by group (redesignated from existing Subdivision (11)). SECTION 1.11 is redesignated from SECTION 9 in the original bill. SECTION 1.12 is redesignated from SECTION 10 in the original bill. C.S.H.B. 3657 differs from the original bill in SECTION 2.01 by amending Section 303.003, Labor Code, to provide that the skills development fund is composed of money transferred into the fund under Section 204.123, Labor Code, and any amount appropriated by the legislature for the purposes of this chapter from the general revenue fund. Section 303.003, Labor Code, is not amended in the original. SECTION 3.01 is redesignated from SECTION 11 in the original bill. SECTION 3.02 is redesignated from SECTION 12 in the original bill. C.S.H.B. 3657 differs from the original bill in SECTION 3.03 (SECTION 13 in the original bill) by amending Section 204.123, by adding "Skills Development Fund" to the title. The substitute specifies that 50 percent, rather than 80 percent in the original bill, of the amount in the holding fund is required to be transferred to the smart jobs fund, and 30 percent to the skills development fund. The substitute makes a conforming change to Subsection (b), and adds new Subsections (c) and (d), as follows: (c) Requires the commission to transfer, from the amount in the holding fund created under Section 204.122 (Holding Fund), Labor Code, 14 percent to the smart jobs fund, 66 percent to the skills development fund, and 20 percent to the RD-fund, if the commission determines on September 1, 1999, that the compensation fund exceeds 100 percent of its floor as computed under Section 204.061 (Ceiling and Floor of Compensation Fund), Labor Code. (d) Provides that Subsection (c) expires October 2, 1999. SECTION 3.04 is redesignated from SECTION 14 in the original bill. SECTION 4.01 is redesignated from SECTION 15 in the original bill. SECTION 4.02 is redesignated from SECTION 16 in the original bill. SECTION 4.03 is redesignated from SECTION 17 in the original bill.