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.