SRC-JBJ, DBM C.S.H.B. 3657 76(R)BILL ANALYSIS
Senate Research CenterC.S.H.B. 3657
76R15164 PB-DBy: Oliveira (Sibley)
Economic Development
5/13/1999
Committee Report (Substituted)
DIGEST
Currently, the smart jobs fund program provides grants to employers for
customized training. The program is administered by the Texas Department
of Economic Development (TDED) and is set to expire December 31, 1999.
C.S.H.B. 3657 reauthorizes the program until TDED's 2001 sunset date. The
bill also creates a rainy day fund to provide a financial cushion for the
program during economic slowdowns, directs new funding to the skills
development fund from the unemployment insurance trust fund, modifies the
wage requirement necessary to access the program, modifies the information
included in the annual report, and requires the performance of a biennial
evaluation of the Smart Jobs and Skills Development program.
PURPOSE
As proposed, C.S.H.B. 3657 sets forth provisions for the continuation,
funding, and operation of certain workforce development programs.
RULEMAKING AUTHORITY
Rulemaking authority is granted to the governing board of the Texas
Department of Economic Development in SECTIONS 1.02 , 1.03, 1.05, 1.06,
1.07, 1.08, 1.09 (Sections 481.152(c), 481.153, 481.155(c), 481.156(c),
481.1565(b), 481.157(b), and 481.159(c) Government Code); and the
TexasWorkforce Commission in SECTIONS 1.04 and 1.07 (Section 481.154(f) and
481.1565(b), 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 define "county
average weekly wage," "group health benefit plan," "large business,"
"medium business," and "qualified job"; to redefine "existing employer,"
"micro-business," and "small business;" and to delete the definitions of
"business development," "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 heading: SMART JOBS FUND PROGRAM; PURPOSE;
ADMINISTRATION. Provides that the smart jobs fund program (program) is
created in the Texas Department of Economic Development (department) as a
work force development incentive program to enhance employment
opportunities for residents of this state and to increase the job skills of
the existing work force by providing job training assistance to businesses
operating in, or locating to, this state, rather than meet the needs of
existing and new industries in this state. Requires the program to award
grants for the creation and retention of qualified jobs. Requires the
governing board of the Texas Department of Economic Development (governing
board) to develop and adopt, by rule, a scoring system that evaluates the
economic impact of grant applications and reflects the criteria set forth
in this subchapter. Requires the executive director of the Texas
Department of Economic Development (executive director) to use the scoring
system and a competitive process to award grants. Sets forth the intent of
the legislature. Requires the governing board to determine appropriate
means to accomplish the goals of the program. Authorizes the governing
board, as necessary to implement those goals, to work in conjunction with
the Texas Workforce Commission and the comptroller of public accounts
(comptroller). Requires the department, in implementing provisions under
this subchapter regarding the classification of this state into regions, to
use the information service regions established by the comptroller under
Section 120, Article V, Chapter 19, Acts of the 72nd Legislature, 1st
Called Session, 1991 (the General Appropriations Act).
SECTION 1.03. Amends Section 481.153, Government Code, to require the
governing board, rather than the policy board, to adopt rules as necessary
to implement the program.
SECTION 1.04. Amends Section 481.154, Government Code, as follows:
Sec. 481.154. New heading: FUNDING; RAINY DAY FUND. Sets forth the
composition of the fund, including any amounts appropriated by the
legislature for the program from the general revenue fund. Prohibits
certain department costs from exceeding the lesser of five percent of the
total amount appropriated for the program for that fiscal year, or $1.5
million in any fiscal year. Provides that the smart jobs rainy day fund is
established as a special trust fund in the custody of the comptroller
separate and apart from all public money or funds of this state. Sets
forth the composition of the smart jobs rainy day fund. Authorizes the
governing board to authorize the executive director to use money in the
smart jobs rainy day fund under certain conditions. Requires the Texas
Workforce Commission (commission), by rule, to define "severe economic
dislocation," for purposes of Subsection (e). Sets forth the information
to be considered by the commission in adopting a definition. Authorizes
the executive director to use the money allocated in the affected region,
if the governing board approves the use of money from the smart jobs rainy
day fund because of a severe economic dislocation occurring in a specific
region of the state. Prohibits, notwithstanding any other provision of
this section, the total combined amount spent in any fiscal year from the
smart jobs fund and the smart jobs rainy day fund from exceeding the amount
appropriated by the legislature for that fiscal year for the operation of
the smart jobs fund program. Requires the executive director to
immediately transfer an excess from the applicable fund to the Unemployment
Compensation Fund, if during any three consecutive months, the balance in
the smart jobs fund or the smart jobs rainy day fund exceeds a certain
amount.
SECTION 1.05. Amends Section 481.155, Government Code, to authorize the
executive director to award grants for projects that meet the requirements
of this chapter. 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 a certain
percentage of the plan. Authorizes the executive director to waive the
coverage requirement for a particular job if the affected employee
voluntarily waives the coverage in the manner prescribed by rules adopted
by the governing baord. Prohibits a grant from being awarded for a certain
project unless each employer participating in the project certifies that
the starting wage for a new job created through the project will be equal
to or greater than the county average weekly wage for the county in which
the job or project is located, rather than for that occupation in the local
labor market area, and that the wage for a job existing on a certain date
will be increased to the greater of: three percent for a microbusiness or
small business or five percent for a business that is not a micro-business
or small business over a certain wage before a certain date; or 100 percent
of the county average weekly wage for the county in which the job or
project is located. Authorizes an employer to request a modification of the
requirements provided by Subsection (d) and Section 481.159(c), if
reasonable factors exist for the modification. Deletes text requiring
money from the smart jobs fund to be spent in all areas of the state.
Deletes text authorizing the executive director to award certain grants at
certain times in certain amounts under certain conditions. Deletes text
requiring the executive director to make a certain ensurance. Deletes text
regarding the program being job driven. Deletes existing subsections (e)
(1) and (2), (i), and (j).
SECTION 1.06. Amends Section 481.156, Government Code, as follows:
Sec. 481.156. New heading: GRANT APPLICATION; AWARDING OF GRANTS. Sets
forth certain individuals who may apply for a grant. Authorizes the board
to exempt, by rule, a micro-business from the requirement to submit a
business and training plan that complies with Subsection (b). Requires the
board to establish a simplified application process for grant applications
from micro-businesses. Authorizes the department to provide assistance
with the application process to all applicants and to give priority to
assisting applicants who are small business or micro-businesses. Requires
the department to minimize the length of the application form and to
simplify as much as possible the review process for grant applications.
Requires the department to notify each applicant as to whether the
application is complete within a certain time period. Deletes text
requiring the executive director to act on a certain application. Makes
conforming changes.
SECTION 1.07. Amends Chapter 481J, Government Code, by adding Section
481.1565, as follows:
Sec. 481.1565. PARTICIPATION IN ADDITIONAL PROGRAMS; APPLICATION
REQUIREMENTS. Prohibits a business from applying for both a grant under
this subchapter and to certain colleges for customized training and
assessment from the college through a grant issued to the college under the
skills development funds, unless the business and the college file an
application for concurrent participation in both programs. Requires the
commission and the board to jointly establish, by rule, the requirements
for the application.
SECTION 1.08. Amends Section 481.157(b), Government Code, authorizes the
governing board, rather than the policy board, to adopt rules modifying the
requirement of Subsection (a) for employers that are small business or
micro-businesses, rather than for employers with fewer than 50 employees.
SECTION 1.09. Amends Section 481.159, Government Code, by amending
Subsections (a) and (c), and adding Subsection (d) to authorize the
executive director to approve any project that meets the requirements of
this subchapter. Requires the department to enter into a contract with a
grant applicant and with each employer participating in the project, if a
project is approved and funds are available. Requires the amount of
allowable expenditures withheld to be remitted to the employer, if a
certain percent of project trainees, other than trainees who leave the
employment voluntarily for better-paying jobs, have been retained in
employment for a certain time period. Requires the board to establish, by
rule, procedures as necessary to verify that a trainee has left the
employment for a better-paying job. Requires each contract to state the
term of the grant award. Requires a grant recipient who does not use all
money awarded under the grant for the prescribed purpose within the
allotted term to reimburse the program by taking certain action within a
certain time period. Requires the executive director to remit money
received under this subsection to the comptroller for deposit in the smart
jobs rainy day fund.
SECTION 1.10. Amends Section 481.160, Government Code, by amending
Subsection (b), and adding Subsection (c), to set forth certain information
to be included in the annual report. Makes conforming and nonsubstantive
changes.
SECTION 1.11. Amends Section 481.161, Government Code, to provide that
this chapter expires December 31, 2001, rather than December 31, 1999.
ARTICLE 2. SKILLS DEVELOPMENT FUND
SECTION 2.01. Amends Section 303.003(a), Labor Code, to set forth the
composition of the skills development fund.
SECTION 2.02. Amends Chapter 303, Labor Code, by adding Sections 303.005
and 303.006, as follows:
Sec. 303.005. PARTICIPATION IN ADDITIONAL PROGRAMS; APPLICATION
REQUIREMENTS. Prohibits an employer from applying both to a public
community or technical college for customized training and assessment from
the college through a grant issued to the college under the fund program
established under this chapter for a grant under the smart jobs fund
program established under Chapter 481J, Government Code, unless the
employer and the college file an application for concurrent participation
in both programs that complies with Section 481.1565, Government Code.
Sec. 303.006. REPORTING REQUIREMENTS. Defines "employee," "employer,"
"existing employer," "in-kind contribution," "job," "large employer,"
"medium employer," "micro-employer," "program," "small employer,"
"trainee," and "wages." Requires the executive director to use the uniform
service regions established by the comptroller, and to report to the
governor and the legislature the status of the program each year. Sets
forth information that the report must include.
ARTICLE 3. STUDY OF WORKFORCE PROGAMS BY COMPTROLLER
SECTION 3.01. Amends Chapter 403, Government Code, by adding Subchapter N,
as follows:
SUBCHAPTER N. STUDY OF CERTAIN WORKFORCE DEVELOPMENT PROGRAMS
Sec. 403.351. PERFORMANCE EVALUATION. Sets forth provisions regarding a
biennial performance evaluation to be conducted by the comptroller.
ARTICLE 4. CONFORMING AMENDMENTS
SECTION 4.01. Amends Section 204.0065, Labor Code, to provide that this
section expires December 31, 2001, rather than December 31, 1999.
SECTION 4.02. Amends Section 204.0625, Labor Code, to provide that this
section expires December 31, 2001, rather than December 31, 1999.
SECTION 4.03. Amends Section 204.123, Labor Code, as follows:
Sec. 204.123. New heading: TRANSFER TO SMART JOBS FUNDS, SKILLS,
DEVELOPMENT FUND, AND COMPENSATION FUND. Requires the Texas Workforce
Commission (commission) if, on September 1 of a year, the commission
determines a certain compensation fund amount, to transfer from the holding
fund created under Section 204.122: 50 percent of the amount in the holding
fund to the smart jobs fund created under Section 481.154(a), rather than
481.154, Government Code; 30 percent of the amount in the holding fund to
the skills development fund created under Section 303.003; and 20 percent
of the amount in the holding fund to the smart jobs rainy day fund created
under Section 481.154(d), Government Code. Requires the commission to
transfer any remaining balance in the holding fund to the smart jobs fund,
the skills development fund, and the smart jobs rainy day fund in the
percentages prescribed by Subsection (a). Requires the commission,
notwithstanding Subsection (a), if, on September 1, 1999, the commission
determines that the amount in the compensation fund will exceed 100 percent
of its floor as computed under Section 204.061 on the next October 1
computation date, to transfer certain percentage amounts from the holding
fund created under Section 204.122. Provides that Subsection (c) and this
subsection expire October 2, 1999.
SECTION 4.04. Amends Section 204.124, Labor Code, to provide that this
subsection expires December 31, 2001, rather than December 31, 1999.
ARTICLE 4. TRANSITION; EFFECTIVE DATE; EMERGENCY
SECTION 5.01. Makes application of this Act prospective to January 1, 2000.
SECTION 5.02. Provides that Section 481.159(d), Government Code, applies
to reimbursement by an employer of money awarded before, on, or after
September 1, 1999.
SECTION 5.03. Effective date: September 1, 1999.
SECTION 5.04. Emergency clause.