By Keffer H.B. No. 1079
76R2903 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the operation and continuation of the smart jobs fund
1-3 program.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 481.151, Government Code, is amended to
1-6 read as follows:
1-7 Sec. 481.151. DEFINITIONS. In this subchapter:
1-8 (1) ["Business development" includes relocation,
1-9 expansion, turnover, diversification, or technological change.]
1-10 [(2) "Demand occupation" means an occupation in which,
1-11 as a result of business development, there are or will be positive
1-12 growth-to-replacement ratios within the next 12 to 24 months,
1-13 according to the best available sources of state and local labor
1-14 market information.]
1-15 [(3) "Emerging occupation" means an occupation that
1-16 arises from forces related to technological changes in the
1-17 workplace and the work of which cannot be performed by workers from
1-18 other occupations without at least two months of customized
1-19 education or training.]
1-20 [(4)] "Employee" means an individual who performs
1-21 services for another under a contract of hire, whether express or
1-22 implied, or oral or written.
1-23 (2) [(5)] "Employer" means a person that employs one
1-24 or more employees.
2-1 (3) [(6)] "Executive director" means the executive
2-2 director of the department.
2-3 (4) [(7)] "Existing employer" means an employer that:
2-4 (A) has been liable to pay contributions under
2-5 Subtitle A, Title 4, Labor Code, [(Texas Unemployment Compensation
2-6 Act)] 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 Subtitle A, Title 4, Labor Code [that Act],
2-10 as determined by the Texas Workforce Commission.
2-11 (5) [(8) "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
2-17 skill development and career path advancement; and]
2-18 [(D) a substantial likelihood of long-term job
2-19 security.]
2-20 [(9)] "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 (6) [(10)] "Job" means employment on a basis
2-24 customarily considered full-time for the applicable occupation and
2-25 industry.
2-26 (7) "Large business" means a business entity with 500
2-27 or more employees.
3-1 (8) "Medium business" means a business entity with at
3-2 least 100 employees but fewer than 500 employees.
3-3 (9) "Micro business" [(11) "Manufacturing occupation"
3-4 means an occupation that is involved in the mechanical or chemical
3-5 transformation of materials or substances into new products.]
3-6 [(12) "Micro-business"] means a [an eligible] business
3-7 entity with not more than 20 employees.
3-8 (10) [(13)] "Minority employer" means a business
3-9 entity at least 51 percent of which is owned by minority group
3-10 members or, in the case of a corporation, at least 51 percent of
3-11 the shares of which are owned by minority group members and that:
3-12 (A) is managed and, in daily operations, is
3-13 controlled by minority group members; and
3-14 (B) is a domestic business entity with a home or
3-15 branch office located in this state and is not a branch or
3-16 subsidiary of a foreign corporation or other foreign business
3-17 entity.
3-18 (11) [(14)] "Minority group members" include:
3-19 (A) African-Americans;
3-20 (B) American Indians;
3-21 (C) Asian-Americans;
3-22 (D) Mexican-Americans and other Americans of
3-23 Hispanic origin; and
3-24 (E) women.
3-25 (12) [(15)] "Program" means the smart jobs fund
3-26 program created under this subchapter.
3-27 (13) [(16)] "Project" means a specific employment
4-1 training project developed and implemented under this subchapter.
4-2 (14) [(17)] "Provider" means a person that provides
4-3 employment-related training. The term includes employers, employer
4-4 associations, labor organizations, community-based organizations,
4-5 training consultants, public and private schools, technical
4-6 institutes, junior or community colleges, senior colleges,
4-7 universities, and proprietary schools, as defined by Section
4-8 132.001, Education Code.
4-9 (15) [(18)] "Small business" means a business entity
4-10 with at least 21 employees but fewer than 100 employees [has the
4-11 meaning assigned that term by Section 481.101].
4-12 (16) [(19) "State average weekly wage" means the
4-13 annual average of the average weekly wage of manufacturing
4-14 production workers in this state as of September 1 of each year, as
4-15 determined by the Texas Workforce Commission, adjusted for regional
4-16 variances.]
4-17 [(20) "Targeted industry" means an industry that
4-18 promotes high-skill, high-wage jobs using Texas-available material
4-19 and human resources, as determined by the department.]
4-20 [(21)] "Trainee" means a participant in a project
4-21 funded under this subchapter.
4-22 (17) [(22)] "Wages" means all forms of compensation or
4-23 remuneration, excluding benefits, payable for a specific period to
4-24 an employee for personal services rendered by that employee.
4-25 SECTION 2. Section 481.152, Government Code, is amended to
4-26 read as follows:
4-27 Sec. 481.152. SMART JOBS FUND PROGRAM; ADMINISTRATION. (a)
5-1 The smart jobs fund program is created in the department as a work
5-2 force development incentive program to enhance employment
5-3 opportunities and to meet the needs of existing and new industries
5-4 in this state.
5-5 (b) [The program shall give priority to the creation and
5-6 retention of family wage jobs and focus on employers in industries
5-7 that promote high-skill, high-wage jobs in high-technology areas
5-8 and on demand occupations that provide those jobs. At least 60
5-9 percent of the money spent under the program shall be used for
5-10 projects that assist existing employers.]
5-11 [(c)] The department shall administer the program.
5-12 (c) [(d)] The executive director may employ personnel as
5-13 necessary to administer the program.
5-14 SECTION 3. Subchapter J, Chapter 481, Government Code, is
5-15 amended by adding Section 481.1525 to read as follows:
5-16 Sec. 481.1525. PROGRAM GOALS. (a) The program shall
5-17 emphasize the creation and retention of high-skill, high-wage jobs
5-18 and occupations that provide those jobs. The program shall
5-19 specifically give priority to:
5-20 (1) high impact economic development projects; and
5-21 (2) job training designed to improve the
5-22 competitiveness of businesses in this state.
5-23 (b) The governing board by rule shall define the
5-24 requirements for a high impact development project and shall
5-25 determine the percentage of the smart jobs fund that may be
5-26 allocated to those projects and to the retention of existing jobs.
5-27 (c) The governing board shall determine appropriate means to
6-1 accomplish the goals of the program. As necessary to implement
6-2 those goals, the governing board may work in conjunction with the
6-3 Texas Workforce Commission and the comptroller.
6-4 SECTION 4. Section 481.154(c), Government Code, is amended
6-5 to read as follows:
6-6 (c) Money in the smart jobs fund may be used for program
6-7 administration, marketing expenses, and evaluation of the program.
6-8 These costs of the department in any fiscal year may not exceed
6-9 five percent of the total amount appropriated for the program for
6-10 that year. In addition, the department shall use money from the
6-11 fund, in a percentage set by the governing board, to monitor the
6-12 subsequent employment experiences of persons who participate in the
6-13 program as trainees in order to evaluate the long-range effect of
6-14 the program. The Texas Workforce Commission shall cooperate with
6-15 the department in implementing this subsection.
6-16 SECTION 5. Section 481.155, Government Code, is amended to
6-17 read as follows:
6-18 Sec. 481.155. GRANTS. (a) The executive director may award
6-19 grants for projects that meet the requirements of this chapter. It
6-20 is the intent of the legislature that, to the greatest extent
6-21 practicable, money from the smart jobs fund shall be spent in all
6-22 areas of the state and that grants shall be awarded to micro
6-23 businesses, small businesses, medium businesses, and large
6-24 businesses in a manner proportionate to the number of persons
6-25 employed by those categories of businesses. The department shall
6-26 use labor market information maintained by the Texas Workforce
6-27 Commission to identify the size of a business.
7-1 (b) Except as provided by Subsection (d), the [The]
7-2 executive director may award a grant or a combination of grants in
7-3 any fiscal year to a single employer in excess of $250,000
7-4 [$1,500,000] or at a rate greater than 10 percent of the annual
7-5 wages of the new or existing job being created or retained with the
7-6 grant only if:
7-7 (1) the employer locates or expands in an enterprise
7-8 zone;
7-9 (2) the employer locates or expands in an adversely
7-10 affected defense-dependent community;
7-11 (3) the employer locates or expands in an area having
7-12 an unemployment rate 1-1/2 times greater than the statewide average
7-13 at the time of the application;
7-14 (4) the employer locates or expands in a county with a
7-15 population of less than 75,000;
7-16 (5) at least 25 percent of the employees hired or
7-17 retained by the employer are economically disadvantaged individuals
7-18 as defined by Section 2303.402(c); or
7-19 (6) the employer is a small business or a micro
7-20 business [micro-business].
7-21 (c) [(b)] The executive director shall attempt to ensure
7-22 that at least 20 percent of the total dollar amount of grants
7-23 awarded to micro businesses, small businesses, medium businesses,
7-24 and large businesses under the program are awarded to minority
7-25 employers.
7-26 (d) The governing board shall make the final award decision
7-27 for a grant application:
8-1 (1) regarding a high impact development project; or
8-2 (2) requesting an award of at least $1 million.
8-3 (e) [(c)] The program is job-driven. A grant may not be
8-4 awarded unless each employer participating in the project certifies
8-5 that:
8-6 (1) a job or job opening exists or will exist at the
8-7 end of the project for which the grant is sought; and
8-8 (2) the job or job opening will be filled by a
8-9 participant in the project.
8-10 (f) [(d)] A grant may not be awarded for a project under
8-11 this section unless each employer participating in the project
8-12 certifies that the starting wage for a new job created through the
8-13 project will be equal to or greater than the prevailing wage for
8-14 that occupation in the local labor market area and that the wage
8-15 for a job existing on the date that the project is scheduled to
8-16 begin will be increased to the greater of:
8-17 (1) three percent for a small business or five percent
8-18 for a business that is not a small business over the wage in effect
8-19 on the day before the date on which the project is scheduled to
8-20 begin for that job; or
8-21 (2) 100 percent of the prevailing wage for that
8-22 occupation in the local labor market area.
8-23 (g) [(e)] An employer [may apply for a grant under this
8-24 chapter, and an employer] who is a micro business [micro-business]
8-25 may request a modification of the requirements provided by
8-26 Subsection (f) [(d)] and Section 481.159(c), if:
8-27 (1) the employer is required to reduce or eliminate
9-1 the employer's work force because of reductions in overall
9-2 employment within an industry;
9-3 (2) a substantial change in the skills required to
9-4 continue the employer's business exists because of technological
9-5 changes; or
9-6 (3) other reasonable factors, as determined by the
9-7 executive director, exist.
9-8 (h) [(f)] Grants awarded under this section for which the
9-9 executive director has modified the requirements of Subsection (f)
9-10 [(d)] may not, in any fiscal year, exceed 10 percent of the total
9-11 dollar amount of grants awarded under the program in that year.
9-12 (i) [(g)] Unless modified by the executive director under
9-13 rules adopted by the governing [policy] board, a grant may not be
9-14 awarded for a project unless each employer participating in the
9-15 project certifies that it will continue to spend on nonmanagerial
9-16 training an amount from private sources equal to the average amount
9-17 spent by that employer on such training for the most recent
9-18 two-year period.
9-19 (j) [(h)] A grant may not be awarded for a project if the
9-20 project will impair existing contracts for services or collective
9-21 bargaining agreements, except that a project inconsistent with the
9-22 terms of a collective bargaining agreement may be undertaken with
9-23 the written concurrence of the collective bargaining unit and the
9-24 employer or employers who are parties to the agreement.
9-25 [(i) During each state fiscal year the executive director
9-26 shall attempt to ensure that at least 50 percent of the total
9-27 dollar amount of grants awarded under this section is awarded to
10-1 small businesses, as defined by Section 481.101.]
10-2 (k) [(j)] In awarding a grant under this section, the
10-3 executive director shall give priority to a project that is located
10-4 in an enterprise zone as defined by Section 2303.003.
10-5 SECTION 6. Section 481.156, Government Code, is amended to
10-6 read as follows:
10-7 Sec. 481.156. GRANT APPLICATION; AWARDING OF GRANTS. (a)
10-8 An employer [The following] may apply for a grant under this
10-9 subchapter. The executive director shall establish multiple
10-10 application review and grant award tracks as provided by this
10-11 section.
10-12 (b) The department may award grants to:
10-13 (1) one or more employers to secure training [for
10-14 demand occupations, emerging occupations, or manufacturing
10-15 occupations];
10-16 (2) one or more employers acting in partnership with
10-17 an employer organization, labor organization, or community-based
10-18 organization to secure training [for demand occupations, emerging
10-19 occupations, or manufacturing occupations]; or
10-20 (3) one or more employers acting in partnership with a
10-21 consortium composed of more than one provider to secure training
10-22 [for demand occupations, emerging occupations, or manufacturing
10-23 occupations].
10-24 (c) [(b)] A grant application must be filed with the
10-25 department in a form approved by the executive director and must
10-26 comply with the requirements adopted under this subchapter and
10-27 rules adopted by the governing board [include a complete business
11-1 and training plan, including:]
11-2 [(1) the number and kind of jobs available;]
11-3 [(2) the skills and competencies required for the
11-4 identified jobs;]
11-5 [(3) the wages to be paid to trainees on successful
11-6 completion of the project;]
11-7 [(4) the goals, objectives, and outcome measures for
11-8 the project;]
11-9 [(5) the proposed curriculum for the project; and]
11-10 [(6) the projected cost per person enrolled, trained,
11-11 hired, and retained in employment]. The executive director shall
11-12 establish a quarterly, competitive application process for grant
11-13 applications:
11-14 (1) submitted by large businesses; or
11-15 (2) requesting an award of more than $250,000.
11-16 (d) The governing board shall ensure that the complexity of
11-17 the application process appropriately corresponds to the size of
11-18 the business and the amount of funds awarded under the grant. The
11-19 executive director shall establish a simplified application
11-20 process for grant applications from small businesses and micro
11-21 businesses and shall ensure that the application process for small
11-22 businesses and micro businesses is an open and ongoing process.
11-23 (e) [(c)] The department may provide assistance with the
11-24 application process to applicants who are large businesses or
11-25 medium businesses and shall provide that assistance to applicants
11-26 who are small businesses or micro businesses [in formulating the
11-27 business and training plan required under Subsection (b)].
12-1 (f) [(d)] The department shall minimize the length of the
12-2 application form and shall simplify as much as possible the review
12-3 process for grant applications.
12-4 (g) [(e)] The executive director or governing board, as
12-5 applicable, shall act on a completed application not later than the
12-6 30th day after the date on which the application is filed with the
12-7 department.
12-8 SECTION 7. Subchapter J, Chapter 481, Government Code, is
12-9 amended by adding Section 481.1565 to read as follows:
12-10 Sec. 481.1565. CONFIDENTIALITY REQUIREMENTS. (a)
12-11 Information provided by an applicant in a grant application is
12-12 confidential information for purposes of Chapter 552, Government
12-13 Code, only as provided by this section.
12-14 (b) Information provided by an applicant whose application
12-15 is denied is confidential information for purposes of Chapter 552,
12-16 Government Code.
12-17 (c) Information, other than financial information, provided
12-18 by an applicant whose application is granted and who accepts an
12-19 award is confidential information for purposes of Chapter 552,
12-20 Government Code, only if the information would otherwise be
12-21 confidential under the terms of that chapter. Financial
12-22 information provided by an applicant whose application is granted
12-23 and who accepts an award is confidential information for purposes
12-24 of Chapter 552, Government Code, until the first anniversary of the
12-25 date on which the grant is awarded. After that date, the financial
12-26 information is confidential information for purposes of Chapter
12-27 552, Government Code, only if the information would otherwise be
13-1 confidential under the terms of that chapter.
13-2 SECTION 8. Section 481.157(b), Government Code, is amended
13-3 to read as follows:
13-4 (b) The governing [policy] board may adopt rules modifying
13-5 the requirements of Subsection (a) for employers who are small
13-6 businesses or micro businesses [with fewer than 50 employees] and
13-7 may also adopt rules modifying the requirements of Subsection (a)
13-8 for projects that provide significant economic benefits to an
13-9 entire region of the state.
13-10 SECTION 9. Sections 481.159(a) and (c), Government Code, are
13-11 amended to read as follows:
13-12 (a) The executive director or governing board, as
13-13 applicable, may approve any project that meets the requirements of
13-14 this subchapter. If [the executive director approves] a project is
13-15 approved and funds are available, the department shall enter into a
13-16 contract with the grant applicant and with each employer
13-17 participating in the project. The contract must specify those
13-18 skills and competencies to be gained as a result of the project.
13-19 (c) Each contract must provide a schedule for payment of
13-20 smart jobs fund money. Twenty-five percent of allowable
13-21 expenditures shall be withheld by the department for 90 days after
13-22 the date of completion of the contract. If at least 85 percent of
13-23 the trainees in the project have been retained in employment for
13-24 that 90-day period, other than trainees who leave the employment
13-25 voluntarily, and have successfully achieved the skills and
13-26 competencies, wage requirements, and other contractual obligations,
13-27 the amount of allowable expenditures withheld shall be remitted to
14-1 the employer. If there is a negative balance, the employer is
14-2 liable for the amount of the negative balance and shall remit that
14-3 amount to the department not later than the 30th day after the date
14-4 on which the employer is notified of the negative balance by the
14-5 department.
14-6 SECTION 10. Section 481.160(b), Government Code, is amended
14-7 to read as follows:
14-8 (b) The annual report must include for that fiscal year:
14-9 (1) the total number of grant applicants under the
14-10 program, classified by micro businesses, small businesses, medium
14-11 businesses, and large businesses;
14-12 (2) the number of employers receiving grants under the
14-13 program;
14-14 (3) [(2)] the total amount of grants awarded;
14-15 (4) [(3)] the value, expressed in dollars and as a
14-16 percentage of total training expenditures, of matching
14-17 contributions made by employers;
14-18 (5) [(4)] the number of [small] businesses, classified
14-19 by micro businesses, small businesses, medium businesses, and large
14-20 businesses [as defined by Section 481.101(3)], that receive grants
14-21 under the program and the total amount of the grants awarded to
14-22 those businesses;
14-23 (6) [(5)] the number of businesses located in
14-24 enterprise zones, as that term is defined by Chapter 2303, that
14-25 receive grants under the program and the total amount of the grants
14-26 awarded to those businesses;
14-27 (7) [(6)] the geographical distribution of employers
15-1 receiving grants under the program;
15-2 (8) [(7)] the total number of jobs created, enhanced,
15-3 or retained under the program, reported by region of the state and
15-4 by occupation;
15-5 (9) [(8)] the wage levels of trainees entering or
15-6 returning to the work force, broken down by current employees
15-7 undergoing retraining and new hires, at three months and one year
15-8 after the conclusion of their training;
15-9 (10) [(9)] the number and percentage of participating
15-10 employers that provide workers' compensation insurance coverage and
15-11 the number and percentage of employees covered;
15-12 (11) [(10)] the number and percentage of participating
15-13 employers that offer health care insurance coverage and the number
15-14 and percentage of employees covered;
15-15 (12) [(11)] the number and percentage of women
15-16 employers and minority employers receiving grants under the program
15-17 and the total amount of the grants awarded, broken out by group;
15-18 (13) [(12)] the number and percentage of women,
15-19 minority group members, and disabled individuals participating as
15-20 trainees in training projects, broken out by group; and
15-21 (14) [(13)] the number and percentage of women private
15-22 providers and private providers who are minority group members
15-23 utilized by employers in training projects, broken out by group.
15-24 SECTION 11. Section 204.006(a), Labor Code, is amended to
15-25 read as follows:
15-26 (a) A person's contribution rate for the calendar year in
15-27 which the person becomes an employer is the greater of:
16-1 (1) the rate established for that year for the major
16-2 group to which the employer is assigned under Section 204.004; or
16-3 (2) two and six-tenths [seven-tenths] percent.
16-4 SECTION 12. Section 204.062(a), Labor Code, is amended to
16-5 read as follows:
16-6 (a) In addition to the general tax computed under Subchapter
16-7 C, an employer entitled to an experience rate shall pay a
16-8 replenishment tax at the rate computed by:
16-9 (1) dividing the numerator described by Subsection (b)
16-10 by the denominator described by Subsection (c);
16-11 (2) multiplying that result by 100 to obtain a
16-12 percentage; [and]
16-13 (3) rounding that result to the nearest hundredth; and
16-14 (4) subtracting 0.1 from the resulting quotient.
16-15 SECTION 13. The following laws are repealed:
16-16 (1) Sections 481.158 and 481.161, Government Code; and
16-17 (2) Sections 204.0065, 204.0625, and 204.124, Labor
16-18 Code.
16-19 SECTION 14. Section 481.155, Government Code, as amended by
16-20 this Act, applies only to a grant awarded by the Texas Department
16-21 of Economic Development on or after January 1, 2000. A grant
16-22 awarded before that date is governed by the law in effect
16-23 immediately before the effective date of this Act, and the former
16-24 law is continued in effect for that purpose.
16-25 SECTION 15. This Act takes effect September 1, 1999.
16-26 SECTION 16. The importance of this legislation and the
16-27 crowded condition of the calendars in both houses create an
17-1 emergency and an imperative public necessity that the
17-2 constitutional rule requiring bills to be read on three several
17-3 days in each house be suspended, and this rule is hereby suspended.