1-1                                   AN ACT
 1-2     relating to the continuation, funding, and operation of certain
 1-3     workforce development programs.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5                     ARTICLE 1.  SMART JOBS FUND PROGRAM
 1-6           SECTION 1.01.  Section 481.151, Government Code, is amended
 1-7     to read as follows:
 1-8           Sec. 481.151.  DEFINITIONS.  In this subchapter:
 1-9                 (1)  "County average weekly wage" means the average
1-10     weekly wage paid by all employers in a county that are covered by
1-11     unemployment compensation insurance, as determined by the Texas
1-12     Workforce Commission for the most recent period for which data is
1-13     available. ["Business development" includes relocation, expansion,
1-14     turnover, diversification, or technological change.]
1-15                 (2)  ["Demand occupation" means an occupation in which,
1-16     as a result of business development, there are or will be positive
1-17     growth-to-replacement ratios within the next 12 to 24 months,
1-18     according to the best available sources of state and local labor
1-19     market information.]
1-20                 [(3)  "Emerging occupation" means an occupation that
1-21     arises from forces related to technological changes in the
1-22     workplace and the work of which cannot be performed by workers from
1-23     other occupations without at least two months of customized
1-24     education or training.]
 2-1                 [(4)]  "Employee" means an individual who performs
 2-2     services for another under a contract of hire, whether express or
 2-3     implied, or oral or written.
 2-4                 (3) [(5)]  "Employer" means a person that employs one
 2-5     or more employees.
 2-6                 (4) [(6)]  "Executive director" means the executive
 2-7     director of the department.
 2-8                 (5) [(7)]  "Existing employer" means an employer that:
 2-9                       (A)  has been liable to pay contributions under
2-10     Subtitle A, Title 4, Labor Code, [(Texas Unemployment Compensation
2-11     Act)] for more than one year;
2-12                       (B)  has employees; and
2-13                       (C)  is in compliance with the reporting and
2-14     payment requirements of Subtitle A, Title 4, Labor Code [that Act],
2-15     as determined by the Texas Workforce Commission.
2-16                 (6)  "Group health benefit plan" means:
2-17                       (A)  a health plan provided by a health
2-18     maintenance organization established under the Texas Health
2-19     Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
2-20     Code);
2-21                       (B)  a health benefit plan approved by the
2-22     commissioner of insurance; or
2-23                       (C)  a self-funded or self-insured employee
2-24     welfare benefit plan that provides health benefits and is
2-25     established in accordance with the Employee Retirement Income
2-26     Security Act of 1974 (29 U.S.C. Section 1001 et seq.), as amended.
2-27                 (7) [(8)  "Family wage job" means a job that offers:]
 3-1                       [(A)  wages equal to or greater than the state
 3-2     average weekly wage;]
 3-3                       [(B)  benefits, such as vacation leave, sick
 3-4     leave, and insurance coverage;]
 3-5                       [(C)  reasonable opportunities for continued
 3-6     skill development and career path advancement; and]
 3-7                       [(D)  a substantial likelihood of long-term job
 3-8     security.]
 3-9                 [(9)]  "In-kind contribution" means a noncash
3-10     contribution of goods and services provided by an employer as all
3-11     or part of the employer's matching share of a grant or project.
3-12                 (8) [(10)]  "Job" means employment on a basis
3-13     customarily considered full-time for the applicable occupation and
3-14     industry.
3-15                 (9)  "Large business" means a business entity that
3-16     employs at least 500 employees.
3-17                 (10)  "Medium business" means a business entity that
3-18     employs more than 99 but fewer than 500 employees.
3-19                 (11)  ["Manufacturing occupation" means an occupation
3-20     that is involved in the mechanical or chemical transformation of
3-21     materials or substances into new products.]
3-22                 [(12)]  "Micro-business" means a [an eligible] business
3-23     entity that employs [with] not more than 20 employees.
3-24                 (12) [(13)]  "Minority employer" means a business
3-25     entity at least 51 percent of which is owned by minority group
3-26     members or, in the case of a corporation, at least 51 percent of
3-27     the shares of which are owned by minority group members and that:
 4-1                       (A)  is managed and, in daily operations, is
 4-2     controlled by minority group members; and
 4-3                       (B)  is a domestic business entity with a home or
 4-4     branch office located in this state and is not a branch or
 4-5     subsidiary of a foreign corporation or other foreign business
 4-6     entity.
 4-7                 (13) [(14)]  "Minority group members" include:
 4-8                       (A)  African-Americans;
 4-9                       (B)  American Indians;
4-10                       (C)  Asian-Americans;
4-11                       (D)  Mexican-Americans and other Americans of
4-12     Hispanic origin; and
4-13                       (E)  women.
4-14                 (14) [(15)]  "Program" means the smart jobs fund
4-15     program created under this subchapter.
4-16                 (15) [(16)]  "Project" means a specific employment
4-17     training project developed and implemented under this subchapter.
4-18                 (16) [(17)]  "Provider" means a person that provides
4-19     employment-related training.  The term includes employers, employer
4-20     associations, labor organizations, community-based organizations,
4-21     training consultants, public and private schools, technical
4-22     institutes, junior or community colleges, senior colleges,
4-23     universities, and proprietary schools, as defined by Section
4-24     132.001, Education Code.
4-25                 (17)  "Qualified job" means a job for which an
4-26     application has been submitted and that:
4-27                       (A)  pays at least 100 percent of the county
 5-1     average weekly wage; and
 5-2                       (B)  is covered by a group health benefit plan
 5-3     for which the business offers to pay at least 50 percent of the
 5-4     premiums or other charges assessed for employee-only coverage under
 5-5     the plan, regardless of whether an employee may voluntarily waive
 5-6     the coverage.
 5-7                 (18)  "Small business" means a business entity that
 5-8     employs more than 20 but fewer than 100 employees [has the meaning
 5-9     assigned that term by Section 481.101].
5-10                 (19)  ["State average weekly wage" means the annual
5-11     average of the average weekly wage of manufacturing production
5-12     workers in this state as of September 1 of each year, as determined
5-13     by the Texas Workforce Commission, adjusted for regional variances.]
5-14                 [(20)  "Targeted industry" means an industry that
5-15     promotes high-skill, high-wage jobs using Texas-available material
5-16     and human resources, as determined by the department.]
5-17                 [(21)]  "Trainee" means a participant in a project
5-18     funded under this subchapter.
5-19                 (20) [(22)]  "Wages" means all forms of compensation or
5-20     remuneration, excluding benefits, payable for a specific period to
5-21     an employee for personal services rendered by that employee.
5-22           SECTION 1.02.  Section 481.152, Government Code, is amended
5-23     to read as follows:
5-24           Sec. 481.152.  SMART JOBS FUND PROGRAM; PURPOSE;
5-25     ADMINISTRATION.  (a)  The smart jobs fund program is created in the
5-26     department as a work force development incentive program to enhance
5-27     employment opportunities for residents of this state and to
 6-1     increase the job skills of the [meet the needs of] existing work
 6-2     force by providing job training assistance to businesses operating
 6-3     [and new industries] in, or relocating to, this state.
 6-4           (b)  The program shall award grants for [give priority to]
 6-5     the creation and retention of qualified [family wage] jobs [and
 6-6     focus on employers in industries that promote high-skill, high-wage
 6-7     jobs in high-technology areas and on demand occupations that
 6-8     provide those jobs].  At least 60 percent of the money spent under
 6-9     the program shall be used for projects that assist existing
6-10     employers.  At least 20 percent shall be used for employers that
6-11     relocate operations to this state.
6-12           (c)  The governing board by rule shall develop and adopt a
6-13     scoring system that evaluates the economic impact of grant
6-14     applications and reflects the criteria set forth in this
6-15     subchapter.  The executive director shall use the scoring system
6-16     and a competitive process to award grants.  It is the intent of the
6-17     legislature that, to the greatest extent practicable:
6-18                 (1)  money from the smart jobs fund be spent:
6-19                       (A)  in all areas of this state; and
6-20                       (B)  in approximate proportion to each region's
6-21     share of the state's population, civilian labor force, unemployed,
6-22     and submission of grant applications for qualified jobs; and
6-23                 (2)  grants shall be awarded to micro-businesses, small
6-24     businesses, medium businesses, large businesses, and minority
6-25     employers in a manner proportionate to the number of persons
6-26     employed by those categories of businesses.
6-27           (d)  The governing board and the department shall determine
 7-1     appropriate means to accomplish the goals of the program.  As
 7-2     necessary to implement those goals, the governing board and the
 7-3     department may work in conjunction with the Texas Workforce
 7-4     Commission and the comptroller.
 7-5           (e)  The department shall administer the program.
 7-6           (f) [(d)]  The executive director may employ personnel as
 7-7     necessary to administer the program.
 7-8           (g)  In implementing provisions under this subchapter
 7-9     regarding the classification of this state into regions, the
7-10     department shall use the uniform service regions established by the
7-11     comptroller under Section 120, Article V, Chapter 19, Acts of the
7-12     72nd Legislature, 1st Called Session, 1991 (the General
7-13     Appropriations Act).
7-14           SECTION 1.03.  Section 481.153, Government Code, is amended
7-15     to read as follows:
7-16           Sec. 481.153.  RULES.  The governing [policy] board shall
7-17     adopt rules as necessary to implement the program.
7-18           SECTION 1.04.  Section 481.154, Government Code, is amended
7-19     to read as follows:
7-20           Sec. 481.154.  FUNDING; RAINY DAY FUND.  (a)  The smart jobs
7-21     fund is established as a special trust fund in the custody of the
7-22     comptroller separate and apart from all public money or funds of
7-23     this state.  The fund is composed of:
7-24                 (1)  money transferred into the fund under Section
7-25     204.123, Labor Code;
7-26                 (2)  gifts, grants, and other donations received by the
7-27     department for the fund; and
 8-1                 (3)  any amounts appropriated by the legislature for
 8-2     the program from the general revenue fund.
 8-3           (b)  The program is funded through the smart jobs fund.
 8-4           (c)  Money in the smart jobs fund may be used for program
 8-5     administration, marketing expenses, and evaluation of the program.
 8-6     These costs of the department in any fiscal year may not exceed the
 8-7     lesser of:
 8-8                 (1)  five percent of the total amount appropriated for
 8-9     the program for that fiscal year; or
8-10                 (2)  $1.5 million.
8-11           (d)  The smart jobs rainy day fund is established as a
8-12     special trust fund in the custody of the comptroller separate and
8-13     apart from all public money or funds of this state.  The smart jobs
8-14     rainy day fund is composed of:
8-15                 (1)  money transferred to that fund as provided by
8-16     Section 204.123, Labor Code;
8-17                 (2)  money returned by employers or recouped by the
8-18     program under Section 481.159(d); and
8-19                 (3)  any other money received by the governing board
8-20     for deposit in that fund.
8-21           (e)  The governing board may authorize the executive director
8-22     to use money in the smart jobs rainy day fund if:
8-23                 (1)  the governing board determines, after consulting
8-24     with the comptroller, that the smart jobs fund contains
8-25     insufficient money to cover the amounts appropriated by the
8-26     legislature to operate the program; and
8-27                 (2)  the Texas Workforce Commission has determined
 9-1     that:
 9-2                       (A)  the unemployment rate in this state is 125
 9-3     percent of the average unemployment rate in this state during the
 9-4     preceding three years; or
 9-5                       (B)  a severe economic dislocation is occurring
 9-6     in a specific region of this state.
 9-7           (f)  The Texas Workforce Commission by rule shall define
 9-8     "severe economic dislocation" for purposes of Subsection (e).  In
 9-9     adopting a definition, the commission shall consider
9-10     employment-related factors, including:
9-11                 (1)  massive layoffs in a region of this state caused
9-12     by:
9-13                       (A)  the closure of military bases;
9-14                       (B)  the effect of the implementation of the
9-15     North American Free Trade Agreement;
9-16                       (C)  employer relocations; or
9-17                       (D)  other analogous situations; and
9-18                 (2)  the number of jobs lost in a region compared to
9-19     the region's usual rates of employment.
9-20           (g)  If the governing board approves the use of money from
9-21     the smart jobs rainy day fund because of a severe economic
9-22     dislocation occurring in a specific region of the state, the
9-23     executive director may use the money allocated from the smart jobs
9-24     rainy day fund solely for projects located in the affected region.
9-25           (h)  Notwithstanding any other provision of this section, the
9-26     total combined amount spent in any fiscal year from the smart jobs
9-27     fund and the smart jobs rainy day fund may not exceed the amount
 10-1    appropriated by the legislature for that fiscal year for the
 10-2    operation of the smart jobs fund program.
 10-3          (i)  If, during any three consecutive months, the balance in
 10-4    the smart jobs fund or the smart jobs rainy day fund exceeds 0.15
 10-5    percent of the total taxable wages for the four calendar quarters
 10-6    ending the preceding June 30, as computed under Section 204.062(c),
 10-7    Labor Code, the executive director shall immediately transfer the
 10-8    excess from the applicable fund to the Unemployment Compensation
 10-9    Fund created under Section 203.021, Labor Code.
10-10          SECTION 1.05.  Section 481.155, Government Code, is amended
10-11    to read as follows:
10-12          Sec. 481.155.  GRANTS.  (a)  The executive director may award
10-13    grants for projects that meet the requirements of this chapter.
10-14    [It is the intent of the legislature that, to the greatest extent
10-15    practicable, money from the smart jobs fund shall be spent in all
10-16    areas of the state. The executive director may award a grant or a
10-17    combination of grants in any fiscal year to a single employer in
10-18    excess of $1,500,000 or at a rate greater than 10 percent of the
10-19    annual wages of the new or existing job being created or retained
10-20    with the grant only if:]
10-21                [(1)  the employer locates or expands in an enterprise
10-22    zone;]
10-23                [(2)  the employer locates or expands in an adversely
10-24    affected defense-dependent community;]
10-25                [(3)  the employer locates or expands in an area having
10-26    an unemployment rate 1-1/2 times greater than the statewide average
10-27    at the time of the application;]
 11-1                [(4)  the employer locates or expands in a county with
 11-2    a population of less than 75,000;]
 11-3                [(5)  at least 25 percent of the employees hired or
 11-4    retained by the employer are economically disadvantaged individuals
 11-5    as defined by Section 2303.402(c); or]
 11-6                [(6)  the employer is a small business or a
 11-7    micro-business.]
 11-8          (b)  [The executive director shall attempt to ensure that at
 11-9    least 20 percent of the total dollar amount of grants awarded under
11-10    the program are awarded to minority employers.]
11-11          [(c)  The program is job-driven.]  A grant may not be awarded
11-12    unless each employer participating in the project certifies that:
11-13                (1)  a job or job opening exists or will exist at the
11-14    end of the project for which the grant is sought; and
11-15                (2)  the job or job opening will be filled by a
11-16    participant in the project.
11-17          (c)  Except as otherwise provided by this subsection, a grant
11-18    may not be awarded unless each employer participating in the
11-19    project certifies that each job under the project is covered by a
11-20    group health benefit plan for which the business pays at least 50
11-21    percent of the premiums or other charges assessed for employee-only
11-22    coverage under the plan.  The executive director may waive the
11-23    coverage requirement for a particular job if the affected employee
11-24    voluntarily waives the coverage in the manner prescribed by rules
11-25    adopted by the governing board.
11-26          (d)  A grant may not be awarded for a project under this
11-27    section unless each employer participating in the project certifies
 12-1    that the starting wage for a new job created through the project
 12-2    will be equal to or greater than the county average weekly
 12-3    [prevailing] wage for the county in which the job or project is
 12-4    located [that occupation in the local labor market area] and that
 12-5    the wage for a job existing on the date that the project is
 12-6    scheduled to begin will be increased to the greater of:
 12-7                (1)  three percent for a micro-business or small
 12-8    business or five percent for a business that is not a
 12-9    micro-business or small business over the wage in effect on the day
12-10    before the date on which the project is scheduled to begin for that
12-11    job; or
12-12                (2)  100 percent of the county average weekly
12-13    [prevailing] wage for the county in which the job or project is
12-14    located [that occupation in the local labor market area].
12-15          (e)  An employer may apply for a grant under this chapter.
12-16    An[, and an] employer [who is a micro-business] may request a
12-17    modification of the requirements provided by Subsection (d) and
12-18    Section 481.159(c), if[:]
12-19                [(1)  the employer is required to reduce or eliminate
12-20    the employer's work force because of reductions in overall
12-21    employment within an industry;]
12-22                [(2)  a substantial change in the skills required to
12-23    continue the employer's business exists because of technological
12-24    changes; or]
12-25                [(3)  other] reasonable factors exist for the
12-26    modification, as determined by the executive director[, exist].
12-27          (f)  Grants awarded under this section for which the
 13-1    executive director has modified the requirements of Subsection (d)
 13-2    may not, in any fiscal year, exceed 10 percent of the total dollar
 13-3    amount of grants awarded under the program in that year.
 13-4          (g)  Unless modified by the executive director under rules
 13-5    adopted by the governing [policy] board, a grant may not be awarded
 13-6    for a project unless each employer participating in the project
 13-7    certifies that it will continue to spend on nonmanagerial training
 13-8    an amount from private sources equal to the average amount spent by
 13-9    that employer on such training for the most recent two-year period.
13-10          (h)  A grant may not be awarded for a project if the project
13-11    will impair existing contracts for services or collective
13-12    bargaining agreements, except that a project inconsistent with the
13-13    terms of a collective bargaining agreement may be undertaken with
13-14    the written concurrence of the collective bargaining unit and the
13-15    employer or employers who are parties to the agreement.
13-16          (i)  Notwithstanding Subsection (d) of this section or any
13-17    other provision of this subchapter, a grant awarded under this
13-18    section for a job training project is exempt from the requirement
13-19    that a job under the project pay at least 100 percent of the county
13-20    average weekly wage for the county in which the job or project is
13-21    located if the grant application was filed before September 1,
13-22    1999, and the application is for training for 1,000 or more
13-23    technology-related jobs,  the training is to begin not later than
13-24    June 1, 2000, and all training is to be completed not later than
13-25    August 31, 2001. This subsection expires September 1, 2001.
13-26          [(i)  During each state fiscal year the executive director
13-27    shall attempt to ensure that at least 50 percent of the  total
 14-1    dollar amount of grants awarded under this section is awarded to
 14-2    small businesses, as defined by Section 481.101.]
 14-3          [(j)  In awarding a grant under this section, the executive
 14-4    director shall give priority to a project that is located in an
 14-5    enterprise zone as defined by Section 2303.003.]
 14-6          SECTION 1.06.  Section 481.156, Government Code, is amended
 14-7    to read as follows:
 14-8          Sec. 481.156.  GRANT APPLICATION; AWARDING OF GRANTS.  (a)
 14-9    The following may apply for a grant under this subchapter:
14-10                (1)  one or more employers to secure training [for
14-11    demand occupations, emerging occupations, or manufacturing
14-12    occupations];
14-13                (2)  one or more employers acting in partnership with
14-14    an employer organization, labor organization, or community-based
14-15    organization to secure training [for demand occupations, emerging
14-16    occupations, or manufacturing occupations]; or
14-17                (3)  one or more employers acting in partnership with a
14-18    consortium composed of more than one provider to secure training
14-19    [for demand occupations, emerging occupations, or manufacturing
14-20    occupations].
14-21          (b)  A grant application must be filed with the department in
14-22    a form approved by the executive director and, except as provided
14-23    by Subsection (c), must include a complete business and training
14-24    plan, including:
14-25                (1)  the number and kind of jobs available;
14-26                (2)  the skills and competencies required for the
14-27    identified jobs;
 15-1                (3)  the wages to be paid to trainees on successful
 15-2    completion of the project;
 15-3                (4)  the goals, objectives, and outcome measures for
 15-4    the project;
 15-5                (5)  the proposed curriculum for the project; and
 15-6                (6)  the projected cost per person enrolled, trained,
 15-7    hired, and retained in employment.
 15-8          (c)  The governing board by rule may exempt a micro-business
 15-9    from the requirement to submit a business and training plan that
15-10    complies with Subsection (b).  The governing board by rule shall
15-11    establish a simplified application process for grant applications
15-12    from micro-businesses.
15-13          (d) [(c)]  The department may provide assistance with the
15-14    application process to all applicants and shall give priority to
15-15    assisting applicants who are small businesses or micro-businesses
15-16    [in formulating the business and training plan required under
15-17    Subsection (b)].
15-18          (e) [(d)]  The department shall minimize the length of the
15-19    application form and shall simplify as much as possible the review
15-20    process for grant applications.
15-21          (f)  The department shall notify each applicant as to whether
15-22    the application is complete not later than the fifth business day
15-23    after the date on which the application is received by the
15-24    department.  [(e)  The executive director shall act on a completed
15-25    application not later than the 30th day after the date on which the
15-26    application is filed with the department.]
15-27          SECTION 1.07.  Subchapter J, Chapter 481, Government Code, is
 16-1    amended by adding Section 481.1565 to read as follows:
 16-2          Sec. 481.1565.  PARTICIPATION IN ADDITIONAL PROGRAMS;
 16-3    APPLICATION REQUIREMENTS.  (a)  A business may not apply both for a
 16-4    grant under this subchapter and to a public community or technical
 16-5    college for customized training and assessment from the college
 16-6    through a grant issued to the college under the skills development
 16-7    fund program established under Chapter 303, Labor Code, unless the
 16-8    business and the college file an application for concurrent
 16-9    participation in both programs.
16-10          (b)  The Texas Workforce Commission and the governing board
16-11    by rule shall jointly establish the requirements for an application
16-12    subject to this section.
16-13          SECTION 1.08.  Section 481.157(b), Government Code, is
16-14    amended to read as follows:
16-15          (b)  The governing [policy] board may adopt rules modifying
16-16    the requirements of Subsection (a)  for employers that are small
16-17    businesses or micro-businesses [with fewer than 50 employees] and
16-18    may also adopt rules modifying the requirements of Subsection (a)
16-19    for projects that provide significant economic benefits to an
16-20    entire region of the state.
16-21          SECTION 1.09.  Section 481.159, Government Code, is amended
16-22    by amending Subsections (a) and (c) and adding Subsection (d) to
16-23    read as follows:
16-24          (a)  The executive director may approve any project that
16-25    meets the requirements of this subchapter.  If [the executive
16-26    director approves] a project is approved and funds are available,
16-27    the department shall enter into a contract with the grant applicant
 17-1    and with each employer participating in the project.  The contract
 17-2    must specify those skills and competencies to be gained as a result
 17-3    of the project.
 17-4          (c)  Each contract must provide a schedule for payment of
 17-5    smart jobs fund money.  Twenty-five percent of allowable
 17-6    expenditures shall be withheld by the department for 90 days after
 17-7    the date of completion of the contract.  If at least 85 percent of
 17-8    the trainees in the project have been retained in employment for
 17-9    that 90-day period, other than trainees who leave the employment
17-10    voluntarily for better-paying jobs, and have successfully achieved
17-11    the skills and competencies, wage requirements, and other
17-12    contractual obligations, the amount of allowable expenditures
17-13    withheld shall be remitted to the employer.  The governing board by
17-14    rule shall establish procedures as necessary to verify that a
17-15    trainee has left the employment for a better-paying job.  If there
17-16    is a negative balance, the employer is liable for the amount of the
17-17    negative balance and shall remit that amount to the department not
17-18    later than the 30th day after the date on which the employer is
17-19    notified of the negative balance by the department.
17-20          (d)  Each contract must state the term of the grant award.  A
17-21    grant recipient who does not use all money awarded under the grant
17-22    for the prescribed purpose within the allotted term shall reimburse
17-23    the program by submitting the appropriate amount to the executive
17-24    director not later than the 30th day after the expiration date of
17-25    the term of the grant award.  The executive director shall remit
17-26    money received under this subsection to the comptroller for deposit
17-27    in the smart jobs rainy day fund.
 18-1          SECTION 1.10.  Section 481.160, Government Code, is amended
 18-2    by amending Subsection (b) and adding Subsection (c) to read as
 18-3    follows:
 18-4          (b)  The annual report must include for that fiscal year:
 18-5                (1)  the total number of applications submitted, the
 18-6    total number of applications approved, and the total number of
 18-7    applications rejected, reported by region of the state and by size
 18-8    of business;
 18-9                (2)  the number of employers receiving grants under the
18-10    program reported by region of the state and the percentage that
18-11    number represents of the total number of employers receiving grants
18-12    under the program on a statewide basis;
18-13                (3) [(2)]  the total amount of money [grants] awarded
18-14    in each region of the state and the percentage that amount
18-15    represents of the total amount of money awarded on a statewide
18-16    basis;
18-17                (4)  a comparison of the percentage of total dollars
18-18    awarded to each region versus each region's percentage of:
18-19                      (A)  the state's population;
18-20                      (B)  the civilian labor force;
18-21                      (C)  the number of unemployed persons; and
18-22                      (D)  the number of eligible grant applications
18-23    for qualified jobs submitted to the department;
18-24                (5) [(3)]  the value, expressed in dollars and as a
18-25    percentage of total training expenditures, of matching
18-26    contributions made by employers;
18-27                (6) [(4)]  the number of [small] businesses, classified
 19-1    by micro-businesses, small businesses, medium businesses, and large
 19-2    businesses [as defined by Section 481.101(3)], that receive grants
 19-3    under the program reported by region of the state and business size
 19-4    and the percentage that number represents of the total number of
 19-5    each of those categories of businesses receiving grants under the
 19-6    program on a statewide basis;
 19-7                (7) [and]  the total amount of money [the grants]
 19-8    awarded to micro-businesses, small businesses, medium businesses,
 19-9    and large businesses, reported by region of the state and business
19-10    size, and the percentage that amount represents of the total amount
19-11    of money awarded to those businesses on a statewide basis;
19-12                (8) [(5)]  the number of businesses located in
19-13    enterprise zones, as that term is defined by Chapter 2303, that
19-14    receive grants under the program and the total amount of the grants
19-15    awarded to those businesses;
19-16                (9) [(6)  the geographical distribution of employers
19-17    receiving grants under the program;]
19-18                [(7)]  the total number of jobs created, enhanced, or
19-19    retained under the program:
19-20                      (A)  [, reported] by region of the state;
19-21                      (B)  [and] by occupation, classified by the
19-22    applicable two-digit standard industrial classification;
19-23                      (C)  by wage level; and
19-24                      (D)  whether attributable to:
19-25                            (i)  relocation of businesses to this
19-26    state, including the percentage the number attributable to the
19-27    relocation of businesses represents of the total number of jobs
 20-1    created, enhanced, or retained under the program on a statewide
 20-2    basis; or
 20-3                            (ii)  training or retraining of employees
 20-4    of existing employers, including the percentage that the number
 20-5    attributable to the training or retraining of employees of existing
 20-6    employers represents of the total number of jobs created, enhanced,
 20-7    or retained under the program on a statewide basis;
 20-8                (10) [(8)]  the average and median weekly wage levels
 20-9    of trainees entering or returning to the workforce, broken down by
20-10    current employees undergoing retraining and new hires, at three
20-11    months and one year after the conclusion of their training;
20-12                (11) [(9)]  the number and percentage of participating
20-13    employers that provide workers' compensation insurance coverage and
20-14    the number and percentage of employees covered;
20-15                (12) [(10)  the number and percentage of participating
20-16    employers that offer health care insurance coverage and] the number
20-17    and percentage of employees covered by the group health benefit
20-18    plan offered by the employer;
20-19                (13) [(11)]  the number and percentage of women,
20-20    disabled persons, [employers] and minority group members
20-21    [employers] receiving grants under the program as employers,
20-22    participating as trainees in training projects, or participating in
20-23    the program as providers [and the total amount of the grants
20-24    awarded], broken out by group;
20-25                (14)  a list of modifications granted under Section
20-26    481.155(e), the name of the project for which the modification was
20-27    granted, and the reason the executive director granted the
 21-1    modification [(12)  the number and percentage of women, minority
 21-2    group members, and disabled individuals participating as trainees
 21-3    in training projects, broken out by group]; and
 21-4                (15)  the number of trainees who have left employment
 21-5    with a grant recipient because the trainee has obtained a
 21-6    better-paying job, as verified under Section 481.159(c) [(13)  the
 21-7    number and percentage of women private providers and private
 21-8    providers who are minority group members utilized by employers in
 21-9    training projects, broken out by group].
21-10          (c)  In addition to the information required under Subsection
21-11    (b), the department shall include in the annual report, for each
21-12    region of the state in which a grant is awarded, the percentage
21-13    paid by employers in that region of the total amount of
21-14    unemployment insurance contributions paid by employers during the
21-15    preceding calendar year.
21-16          SECTION 1.11.  Section 481.161, Government Code, is amended
21-17    to read as follows:
21-18          Sec. 481.161.  EXPIRATION.  This subchapter expires December
21-19    31, 2001 [1999].
21-20                    ARTICLE 2.  SKILLS DEVELOPMENT FUND
21-21          SECTION 2.01.  Section 303.003(a), Labor Code, is amended to
21-22    read as follows:
21-23          (a)  To achieve the purposes of this chapter, the skills
21-24    development fund is created.  The fund is composed of:
21-25                (1)  money transferred into the fund under Section
21-26    204.123; and
21-27                (2)  any amounts appropriated by the legislature for
 22-1    the purpose of this chapter from [money in] the general revenue
 22-2    fund.
 22-3          SECTION 2.02.  Chapter 303, Labor Code, is amended by adding
 22-4    Sections 303.005 and 303.006 to read as follows:
 22-5          Sec. 303.005.  PARTICIPATION IN ADDITIONAL PROGRAMS;
 22-6    APPLICATION REQUIREMENTS.  An employer may not apply both  to a
 22-7    public community or technical college for customized training and
 22-8    assessment from the college through a grant issued to the college
 22-9    under the skills development fund program established under this
22-10    chapter and for a grant under the smart jobs fund program
22-11    established under Subchapter J, Chapter 481, Government Code,
22-12    unless the employer and the college file an application for
22-13    concurrent participation in both programs that complies with
22-14    Section 481.1565, Government Code.
22-15          Sec. 303.006.  REPORTING REQUIREMENTS.  (a)  In this section:
22-16                (1)  "Employee" means an individual who performs
22-17    services for another under a contract of hire, whether express or
22-18    implied, or oral or written.
22-19                (2)  "Employer" means a person that employs one or more
22-20    employees.
22-21                (3)  "Existing employer" means an employer that:
22-22                      (A)  has been liable to pay contributions under
22-23    Subtitle A, Title 4, for more than one year;
22-24                      (B)  has employees; and
22-25                      (C)  is in compliance with the reporting and
22-26    payment requirements of Subtitle A, Title 4, as determined by the
22-27    Texas Workforce Commission.
 23-1                (4)  "In-kind contribution" means a noncash
 23-2    contribution of goods and services provided by an employer as all
 23-3    or part of the employer's matching share of a grant or project.
 23-4                (5)  "Job" means employment on a basis customarily
 23-5    considered full-time for the applicable occupation and industry.
 23-6                (6)  "Large employer" means a business entity that
 23-7    employs at least 500 employees.
 23-8                (7)  "Medium employer" means a business entity that
 23-9    employs more than 99 but fewer than 500 employees.
23-10                (8)  "Micro-employer" means a business entity that
23-11    employs not more than 20 employees.
23-12                (9)  "Program" means the skills development fund
23-13    program created under this chapter.
23-14                (10)  "Small employer" means a business entity that
23-15    employs more than 20 but fewer than 100 employees.
23-16                (11)  "Trainee" means a participant in a project funded
23-17    under this chapter.
23-18                (12)  "Wages" means all forms of compensation or
23-19    remuneration, excluding benefits, payable for a specific period to
23-20    an employee for personal services rendered by that employee.
23-21          (b)  In implementing provisions under this section regarding
23-22    the classification of this state into regions, the executive
23-23    director shall use the uniform service regions established by the
23-24    comptroller under Section 120, Article V, Chapter 19, Acts of the
23-25    72nd Legislature, 1st Called Session, 1991 (the General
23-26    Appropriations Act).
23-27          (c)  The executive director shall report to the governor and
 24-1    the legislature at the end of each fiscal year the status of the
 24-2    program established under this chapter.
 24-3          (d)  The annual report must include for that fiscal year:
 24-4                (1)  the total number of applications submitted, the
 24-5    total number of applications approved, and the total number of
 24-6    applications rejected by region of the state;
 24-7                (2)  the average and median weekly wage levels of
 24-8    trainees under this chapter entering or returning to the workforce,
 24-9    broken down by:
24-10                      (A)  current employees undergoing retraining;
24-11                      (B)  new hires; and
24-12                      (C)  region of the state;
24-13                (3)  the average and median weekly wage levels of
24-14    trainees under this chapter entering or returning to the workforce,
24-15    broken down by region of the state;
24-16                (4)  the number and percentage of trainees covered by
24-17    health care insurance coverage, workers' compensation insurance
24-18    coverage, and other analogous benefit programs;
24-19                (5)  the total amount of money awarded in each region
24-20    of the state and the percentage that amount represents of the total
24-21    amount of money awarded on a statewide basis;
24-22                (6)  a comparison of the percentage of total dollars
24-23    awarded to each region versus each region's percentage of:
24-24                      (A)  the state's population;
24-25                      (B)  the civilian labor force;
24-26                      (C)  the number of unemployed persons; and
24-27                      (D)  the number of qualified grant applications
 25-1    submitted to the commission by public community and technical
 25-2    colleges;
 25-3                (7)  the total amount of money awarded to
 25-4    micro-employers, small employers, medium employers, and large
 25-5    employers, reported by region of the state; and
 25-6                (8)  the total number of jobs created or persons
 25-7    retrained under the program:
 25-8                      (A)  by region of the state;
 25-9                      (B)  by occupation classified by the two-digit
25-10    standard industrial classification;
25-11                      (C)  by wage level; and
25-12                      (D)  whether attributable to:
25-13                            (i)  relocation of businesses to this
25-14    state; or
25-15                            (ii)  training or retraining of employees
25-16    of existing employers.
25-17          ARTICLE 3.  STUDY OF WORKFORCE PROGRAMS BY COMPTROLLER
25-18          SECTION 3.01.  Chapter 403, Government Code, is amended by
25-19    adding Subchapter N to read as follows:
25-20      SUBCHAPTER N.  STUDY OF CERTAIN WORKFORCE DEVELOPMENT PROGRAMS
25-21          Sec. 403.351.  PERFORMANCE EVALUATION.  (a)  The comptroller
25-22    shall perform a biennial performance evaluation of:
25-23                (1)  the smart jobs fund program established under
25-24    Subchapter J, Chapter 481; and
25-25                (2)  the skills development fund program established
25-26    under Chapter 303, Labor Code.
25-27          (b)  The evaluation must include:
 26-1                (1)  an analysis of the wage levels of trainees one
 26-2    year and three years after the end of the trainees' participation
 26-3    in the programs;
 26-4                (2)  information relating to the number of trainees
 26-5    employed in the same field after one year and three years;
 26-6                (3)  a survey and analysis of program satisfaction from
 26-7    former grant recipients;
 26-8                (4)  a description of the overall impact of the
 26-9    programs on economic development in this state in general and on
26-10    economically distressed areas of this state in particular; and
26-11                (5)  any additional information determined to be
26-12    necessary by the comptroller to analyze the performance and impact
26-13    of the programs.
26-14          (c)  In performing the evaluation required by this section,
26-15    the comptroller shall also analyze the efficiency of the programs
26-16    subject to this section and the use of administrative funds by
26-17    those programs.
26-18          (d)  The Texas Department of Economic Development, the Texas
26-19    Workforce Commission, and the State Occupational Information
26-20    Coordinating Committee shall cooperate with the comptroller in
26-21    implementing this section.
26-22                     ARTICLE 4.  CONFORMING AMENDMENTS
26-23          SECTION 4.01.  Section 204.0065, Labor Code, is amended to
26-24    read as follows:
26-25          Sec. 204.0065.  TEMPORARY INITIAL CONTRIBUTION RATE.
26-26    Notwithstanding Section 204.006, on and after January 1, 1994, a
26-27    person's contribution rate shall be two and six-tenths percent
 27-1    until the date the experience rate computed under Section 204.041
 27-2    takes effect for the employer.  This section expires December 31,
 27-3    2001 [1999].
 27-4          SECTION 4.02.  Section 204.0625, Labor Code, is amended to
 27-5    read as follows:
 27-6          Sec. 204.0625.  TEMPORARY ADJUSTMENT TO REPLENISHMENT TAX
 27-7    RATE.  On and after January 1, 1994, the replenishment tax rate
 27-8    computed under Section 204.062 shall be adjusted to a rate computed
 27-9    by subtracting 0.1 from the quotient computed under Section
27-10    204.062(a).  This section expires December 31, 2001 [1999].
27-11          SECTION 4.03.  Section 204.123, Labor Code, is amended to
27-12    read as follows:
27-13          Sec. 204.123.  TRANSFER TO SMART JOBS FUNDS, SKILLS
27-14    DEVELOPMENT FUND, AND COMPENSATION FUND.  (a)  If, on September 1
27-15    of a year, the commission determines that the amount in the
27-16    compensation fund will exceed 100 percent of its floor as computed
27-17    under Section 204.061 on the next October 1 computation date, the
27-18    commission shall transfer from [the amount in] the holding fund
27-19    created under Section 204.122:
27-20                (1)  50 percent of the amount in the holding fund to
27-21    the smart jobs fund created under Section 481.154(a) [481.154],
27-22    Government Code;
27-23                (2)  30 percent of the amount in the holding fund to
27-24    the skills development fund created under Section 303.003; and
27-25                (3)  20 percent of the amount in the holding fund to
27-26    the smart jobs rainy day fund created under Section 481.154(d),
27-27    Government Code.
 28-1          (b)  If, on September 1 of a year, the commission determines
 28-2    that the amount in the compensation fund will be at or below 100
 28-3    percent of its floor as computed under Section 204.061 on the next
 28-4    October 1 computation date, the commission shall transfer to the
 28-5    compensation fund as much of the amount in the holding fund as is
 28-6    necessary to raise the amount in the compensation fund to 100
 28-7    percent of its floor, up to and including the entire amount in the
 28-8    holding fund.  The commission shall transfer any remaining balance
 28-9    in the holding fund to the smart jobs fund, the skills development
28-10    fund, and the smart jobs rainy day fund in the percentages
28-11    prescribed by Subsection (a) [created under Section 481.154,
28-12    Government Code].
28-13          (c)  Notwithstanding Subsection (a), if, on September 1,
28-14    1999, the commission determines that the amount in the compensation
28-15    fund will exceed 100 percent of its floor as computed under Section
28-16    204.061 on the next October 1 computation date, the commission
28-17    shall transfer from the holding fund created under Section 204.122:
28-18                (1)  14 percent of the amount in the holding fund to
28-19    the smart jobs fund created under Section 481.154(a), Government
28-20    Code;
28-21                (2)  66 percent of the amount in the holding fund to
28-22    the skills development fund created under Section 303.003; and
28-23                (3)  20 percent of the amount in the holding fund to
28-24    the smart jobs rainy day fund created under Section 481.154(d),
28-25    Government Code.
28-26          (d)  Subsection (c) and this subsection expire October 2,
28-27    1999.
 29-1          SECTION 4.04.  Section 204.124, Labor Code, is amended to
 29-2    read as follows:
 29-3          Sec. 204.124.  EXPIRATION.  This subchapter expires December
 29-4    31, 2001 [1999].
 29-5             ARTICLE 5.  TRANSITION; EFFECTIVE DATE; EMERGENCY
 29-6          SECTION 5.01.  Section 481.155, Government Code, as amended
 29-7    by this Act, applies only to a grant awarded by the Texas
 29-8    Department of Economic Development on or after January  1, 2000.  A
 29-9    grant awarded before that date is governed by the law in effect
29-10    immediately before the effective date of this Act, and the former
29-11    law is continued in effect for that purpose.
29-12          SECTION 5.02.  Section 481.159(d), Government Code, as added
29-13    by this Act, applies to reimbursement by an employer of money
29-14    awarded under a grant awarded before, on, or after September 1,
29-15    1999.
29-16          SECTION 5.03.  This Act takes effect September 1, 1999.
29-17          SECTION 5.04.  The importance of this legislation and the
29-18    crowded condition of the calendars in both houses create an
29-19    emergency and an imperative public necessity that the
29-20    constitutional rule requiring bills to be read on three several
29-21    days in each house be suspended, and this rule is hereby suspended.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I certify that H.B. No. 3657 was passed by the House on April
         23, 1999, by a non-record vote; and that the House concurred in
         Senate amendments to H.B. No. 3657 on May 27, 1999, by a non-record
         vote.
                                             _______________________________
                                                 Chief Clerk of the House
               I certify that H.B. No. 3657 was passed by the Senate, with
         amendments, on May 24, 1999, by a viva-voce vote.
                                             _______________________________
                                                 Secretary of the Senate
         APPROVED:  _____________________
                            Date
                    _____________________
                          Governor