By Oliveira H.B. No. 3657
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the continuation, funding, and operation of the smart
1-3 jobs fund 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) "County average weekly wage" means the average
1-11 weekly wage paid by all employers in a county that are covered by
1-12 unemployment compensation insurance, as determined by the Texas
1-13 Workforce Commission for the most recent period for which data is
1-14 available. [
"Demand occupation" means an occupation in which, as a
1-15 result of business development, there are or will be positive
1-16 growth-to-replacement ratios within the next 12 to 24 months,
1-17 according to the best available sources of state and local labor
1-18 market information.]
1-19 (3) [ "Emerging occupation" means an occupation that
1-20 arises from forces related to technological changes in the
1-21 workplace and the work of which cannot be performed by workers from
1-22 other occupations without at least two months of customized
1-23 education or training.]
1-24 [ (4)] "Employee" means an individual who performs
2-1 services for another under a contract of hire, whether express or
2-2 implied, or oral or written.
2-3 (4) [ (5)] "Employer" means a person that employs one
2-4 or more employees.
2-5 (5) [ (6)] "Executive director" means the executive
2-6 director of the department.
2-7 (6) [ (7)] "Existing employer" means an employer that:
2-8 (A) has been liable to pay contributions under
2-9 Subtitle A, Title 4, Labor Code, [ (Texas Unemployment Compensation
2-10 Act)] for more than one year;
2-11 (B) has employees; and
2-12 (C) is in compliance with the reporting and
2-13 payment requirements of Subtitle A, Title 4, Labor Code [ that Act],
2-14 as determined by the Texas Workforce Commission.
2-15 (7) [ (8) "Family wage job" means a job that offers:]
2-16 [ (A) wages equal to or greater than the state
2-17 average weekly wage;]
2-18 [ (B) benefits, such as vacation leave, sick
2-19 leave, and insurance coverage;]
2-20 [ (C) reasonable opportunities for continued
2-21 skill development and career path advancement; and]
2-22 [ (D) a substantial likelihood of long-term job
2-24 [ (9)] "In-kind contribution" means a noncash
2-25 contribution of goods and services provided by an employer as all
2-26 or part of the employer's matching share of a grant or project.
2-27 (8) [ (10)] "Job" means employment on a basis
3-1 customarily considered full-time for the applicable occupation and
3-3 (9) "Large business" means a business entity that
3-4 employs at least 500 employees.
3-5 (10) "Medium business" means a business entity that
3-6 employs more than 99 but fewer than 500 employees.
3-7 (11) [ "Manufacturing occupation" means an occupation
3-8 that is involved in the mechanical or chemical transformation of
3-9 materials or substances into new products.]
3-10 [ (12)] "Micro-business" means a [ an eligible] business
3-11 entity that employs [ with] not more than 20 employees.
3-12 (12) [ (13)] "Minority employer" means a business
3-13 entity at least 51 percent of which is owned by minority group
3-14 members or, in the case of a corporation, at least 51 percent of
3-15 the shares of which are owned by minority group members and that:
3-16 (A) is managed and, in daily operations, is
3-17 controlled by minority group members; and
3-18 (B) is a domestic business entity with a home or
3-19 branch office located in this state and is not a branch or
3-20 subsidiary of a foreign corporation or other foreign business
3-22 (13) [ (14)] "Minority group members" include:
3-23 (A) African-Americans;
3-24 (B) American Indians;
3-25 (C) Asian-Americans;
3-26 (D) Mexican-Americans and other Americans of
3-27 Hispanic origin; and
4-1 (E) women.
4-2 (14) [ (15)] "Program" means the smart jobs fund
4-3 program created under this subchapter.
4-4 (15) [ (16)] "Project" means a specific employment
4-5 training project developed and implemented under this subchapter.
4-6 (16) [ (17)] "Provider" means a person that provides
4-7 employment-related training. The term includes employers, employer
4-8 associations, labor organizations, community-based organizations,
4-9 training consultants, public and private schools, technical
4-10 institutes, junior or community colleges, senior colleges,
4-11 universities, and proprietary schools, as defined by Section
4-12 132.001, Education Code.
4-13 (17) [ (18)] "Small business" means a business entity
4-14 that employs more than 20 but fewer than 100 employees [ has the
4-15 meaning assigned that term by Section 481.101].
4-16 (18) [ (19) "State average weekly wage" means the
4-17 annual average of the average weekly wage of manufacturing
4-18 production workers in this state as of September 1 of each year, as
4-19 determined by the Texas Workforce Commission, adjusted for regional
4-21 [ (20)] "Targeted industry" means an industry that
4-22 promotes high-skill, high-wage jobs using Texas-available material
4-23 and human resources, as determined by the department.
4-24 (19) [ (21)] "Trainee" means a participant in a project
4-25 funded under this subchapter.
4-26 (20) [ (22)] "Wages" means all forms of compensation or
4-27 remuneration, excluding benefits, payable for a specific period to
5-1 an employee for personal services rendered by that employee.
5-2 SECTION 2. Section 481.152, Government Code, is amended to
5-3 read as follows:
5-4 Sec. 481.152. SMART JOBS FUND PROGRAM; ADMINISTRATION. (a)
5-5 The smart jobs fund program is created in the department as a work
5-6 force development incentive program to enhance employment
5-7 opportunities for residents of this state and to increase the
5-8 competitiveness of the [ meet the needs of] existing work force [ and
5-9 new industries] in this state.
5-10 (b) The program shall give priority to the creation and
5-11 retention of [ family wage] jobs [ and focus on employers] in
5-12 targeted industries that pay more than the county average weekly
5-13 wage and provide health care benefits [ promote high-skill,
5-14 high-wage jobs in high-technology areas and on demand occupations
5-15 that provide those jobs]. At least 60 percent of the money spent
5-16 under the program shall be used for projects that assist existing
5-18 (c) The department shall administer the program.
5-19 (d) The executive director may employ personnel as necessary
5-20 to administer the program.
5-21 SECTION 3. Section 481.153, Government Code, is amended to
5-22 read as follows:
5-23 Sec. 481.153. RULES. The governing [ policy] board shall
5-24 adopt rules as necessary to implement the program.
5-25 SECTION 4. Section 481.154, Government Code, is amended to
5-26 read as follows:
5-27 Sec. 481.154. FUNDING; RAINY DAY FUND. (a) The smart jobs
6-1 fund is established as a special trust fund in the custody of the
6-2 comptroller separate and apart from all public money or funds of
6-3 this state. The fund is composed of:
6-4 (1) money transferred into the fund under Section
6-5 204.123, Labor Code;
6-6 (2) gifts, grants, and other donations received by the
6-7 department for the fund; and
6-8 (3) any amounts appropriated by the legislature for
6-9 the program.
6-10 (b) The program is funded through the smart jobs fund.
6-11 (c) Money in the smart jobs fund may be used for program
6-12 administration, marketing expenses, and evaluation of the program.
6-13 These costs of the department in any fiscal year may not exceed
6-14 five percent of the total amount appropriated for the program for
6-15 that year.
6-16 (d) The smart jobs rainy day fund is established as a
6-17 special trust fund in the custody of the comptroller separate and
6-18 apart from all public money or funds of this state. The smart jobs
6-19 rainy day fund is composed of:
6-20 (1) money transferred to that fund as provided by
6-21 Section 204.123, Labor Code;
6-22 (2) money returned by employers or recouped by the
6-23 program under Section 481.159(d); and
6-24 (3) any other money received by the governing board
6-25 for deposit in that fund.
6-26 (e) The governing board may authorize the executive director
6-27 to use money in the smart jobs rainy day fund if:
7-1 (1) the governing board determines, after consulting
7-2 with the comptroller, that the smart jobs fund contains
7-3 insufficient money to cover the amounts appropriated by the
7-4 legislature to operate the program; and
7-5 (2) the Texas Workforce Commission has determined
7-7 (A) the unemployment rate in this state is 125
7-8 percent of the average unemployment rate in this state during the
7-9 preceding three years; or
7-10 (B) a severe economic dislocation is occurring
7-11 in a specific region of this state.
7-12 (f) The Texas Workforce Commission by rule shall define
7-13 "severe economic dislocation" for purposes of Subsection (e). In
7-14 adopting a definition, that commission shall consider
7-15 employment-related factors, including:
7-16 (1) massive layoffs in a region of this state caused
7-18 (A) the closure of military bases;
7-19 (B) the effect of the implementation of the
7-20 North American Free Trade Agreement;
7-21 (C) employer relocations; or
7-22 (D) other analogous situations; and
7-23 (2) the number of jobs lost in a region compared to
7-24 the region's usual rates of employment.
7-25 (g) If the governing board approves the use of money from
7-26 the smart jobs rainy day fund because of a severe economic
7-27 dislocation occurring in a specific region of the state, the
8-1 executive director may use the money allocated from the smart jobs
8-2 rainy day fund solely for projects located in the affected region.
8-3 (h) Notwithstanding any other provision of this section, the
8-4 total combined amount spent in any fiscal year from the smart jobs
8-5 fund and the smart jobs rainy day fund may not exceed the amount
8-6 appropriated by the legislature for that fiscal year for the
8-7 operation of the smart jobs fund program.
8-8 (i) If, during any three consecutive months, the balance in
8-9 the smart jobs fund or the smart jobs rainy day fund exceeds 0.15
8-10 percent of the total taxable wages for the four calendar quarters
8-11 ending the preceding June 30, as computed under Section 204.062(c),
8-12 Labor Code, the executive director shall immediately transfer the
8-13 excess from the applicable fund to the Unemployment Compensation
8-14 Fund created under Section 203.021, Labor Code.
8-15 SECTION 5. Sections 481.155(a), (d), and (g), Government
8-16 Code, are amended to read as follows:
8-17 (a) The executive director may award grants for projects
8-18 that meet the requirements of this chapter. The executive director
8-19 shall award the grants through a competitive process and shall
8-20 develop and use a scoring system that evaluates grant applications.
8-21 It is the intent of the legislature that, to the greatest extent
8-22 practicable, money from the smart jobs fund shall be spent in all
8-23 areas of the state. [ The executive director may award a grant or a
8-24 combination of grants in any fiscal year to a single employer in
8-25 excess of $1,500,000 or at a rate greater than 10 percent of the
8-26 annual wages of the new or existing job being created or retained
8-27 with the grant only if:]
9-1 [ (1) the employer locates or expands in an enterprise
9-3 [ (2) the employer locates or expands in an adversely
9-4 affected defense-dependent community;]
9-5 [ (3) the employer locates or expands in an area having
9-6 an unemployment rate 1 1/2 times greater than the statewide average
9-7 at the time of the application;]
9-8 [ (4) the employer locates or expands in a county with
9-9 a population of less than 75,000;]
9-10 [ (5) at least 25 percent of the employees hired or
9-11 retained by the employer are economically disadvantaged individuals
9-12 as defined by Section 2303.402(c); or]
9-13 [ (6) the employer is a small business or a
9-15 (d) A grant may not be awarded for a project under this
9-16 section unless each employer participating in the project certifies
9-17 that the starting wage for a new job created through the project
9-18 will be equal to or greater than the county average weekly
9-19 [ prevailing] wage for the county in which the job or project is
9-20 located [ that occupation in the local labor market area] and that
9-21 the wage for a job existing on the date that the project is
9-22 scheduled to begin will be increased to the greater of:
9-23 (1) three percent for a small business or five percent
9-24 for a business that is not a small business over the wage in effect
9-25 on the day before the date on which the project is scheduled to
9-26 begin for that job; or
9-27 (2) 100 percent of the county average weekly
10-1 [ prevailing] wage for the county in which the job or project is
10-2 located [ that occupation in the local labor market area].
10-3 (g) Unless modified by the executive director under rules
10-4 adopted by the governing [ policy] board, a grant may not be awarded
10-5 for a project unless each employer participating in the project
10-6 certifies that it will continue to spend on nonmanagerial training
10-7 an amount from private sources equal to the average amount spent by
10-8 that employer on such training for the most recent two-year period.
10-9 SECTION 6. Sections 481.156(c) and (e), Government Code, are
10-10 amended to read as follows:
10-11 (c) The department may provide technical assistance to
10-12 applicants in formulating the business and training plan required
10-13 under Subsection (b).
10-14 (e) The department shall notify each applicant as to whether
10-15 the application is complete not later than the fifth business day
10-16 after the date on which the application is received by the
10-17 department. The executive director shall act on a completed
10-18 application not later than the 30th day after the date on which the
10-19 department notifies the applicant that the application is complete
10-20 [ filed with the department].
10-21 SECTION 7. Section 481.159, Government Code, is amended by
10-22 adding Subsection (d) to read as follows:
10-23 (d) Each contract must state the term of the grant award. A
10-24 grant recipient who does not use all money awarded under the grant
10-25 for the prescribed purpose within the allotted term shall reimburse
10-26 the program by submitting the appropriate amount to the executive
10-27 director not later than the 30th day after the expiration date of
11-1 the term of the grant award. The executive director shall remit
11-2 money received under this subsection to the comptroller for deposit
11-3 in the smart jobs rainy day fund.
11-4 SECTION 8. Section 481.160(b), Government Code, is amended
11-5 to read as follows:
11-6 (b) The annual report must include for that fiscal year:
11-7 (1) the number of employers receiving grants under the
11-9 (2) the total amount of grants awarded;
11-10 (3) the value, expressed in dollars and as a
11-11 percentage of total training expenditures, of matching
11-12 contributions made by employers;
11-13 (4) the number of [ small] businesses[ , as defined by
11-14 Section 481.101(3),] that receive grants under the program,
11-15 classified as micro-businesses, small businesses, medium
11-16 businesses, and large businesses, and the total amount of the
11-17 grants awarded to those businesses;
11-18 (5) the number of businesses located in enterprise
11-19 zones, as that term is defined by Chapter 2303, that receive grants
11-20 under the program and the total amount of the grants awarded to
11-21 those businesses;
11-22 (6) the geographical distribution of employers
11-23 receiving grants under the program;
11-24 (7) the total number of jobs created, enhanced, or
11-25 retained under the program, reported by region of the state and by
11-27 (8) the wage levels of trainees entering or returning
12-1 to the work force, broken down by current employees undergoing
12-2 retraining and new hires, at three months and one year after the
12-3 conclusion of their training;
12-4 (9) the number and percentage of participating
12-5 employers that provide workers' compensation insurance coverage and
12-6 the number and percentage of employees covered;
12-7 (10) the number and percentage of participating
12-8 employers that offer health care insurance coverage and the number
12-9 and percentage of employees covered;
12-10 (11) the number and percentage of women employers and
12-11 minority employers receiving grants under the program and the total
12-12 amount of the grants awarded, broken out by group;
12-13 (12) the number and percentage of women, minority
12-14 group members, and disabled individuals participating as trainees
12-15 in training projects, broken out by group; and
12-16 (13) the number and percentage of women private
12-17 providers and private providers who are minority group members
12-18 utilized by employers in training projects, broken out by group.
12-19 SECTION 9. Subchapter J, Chapter 481, Government Code, is
12-20 amended by adding Section 481.1605 to read as follows:
12-21 Sec. 481.1605. PERFORMANCE EVALUATION. (a) The governing
12-22 board shall provide for the implementation of a biennial
12-23 performance evaluation of the smart jobs fund program. The
12-24 evaluation must include:
12-25 (1) an analysis of the wage levels of trainees one
12-26 year and three years after the end of the trainees' participation
12-27 in the program;
13-1 (2) information relating to the number of trainees
13-2 employed in the same occupation after one year and three years;
13-3 (3) a survey and analysis of program satisfaction from
13-4 former grant recipients;
13-5 (4) a description of the overall impact of the program
13-6 on economic development in this state in general and on
13-7 economically distressed areas of this state in particular; and
13-8 (5) any additional information determined to be
13-9 necessary by the governing board to analyze the performance and
13-10 impact of the program.
13-11 (b) The governing board may contract with the comptroller or
13-12 another state agency to perform the evaluation and may submit
13-13 requests for proposals to contract with a private vendor for
13-14 performance of the evaluation. The governing board may enter into
13-15 contracts, memoranda of understanding, or interagency agreements as
13-16 necessary to implement this section.
13-17 (c) In performing the evaluation required by this section,
13-18 the person performing the evaluation shall also analyze the
13-19 efficiency of the program and the use of administrative funds by
13-20 the program.
13-21 (d) The department, the Texas Workforce Commission, and the
13-22 State Occupational Information Coordinating Committee shall
13-23 cooperate with the person who performs the evaluation in
13-24 implementing this section.
13-25 (e) The governing board shall pay the costs of the
13-26 evaluation from money authorized under Section 481.154(c). No
13-27 additional funds may be spent on the performance of the evaluation.
14-1 SECTION 10. Section 481.161, Government Code, is amended to
14-2 read as follows:
14-3 Sec. 481.161. EXPIRATION. This subchapter expires December
14-4 31, 2001 [ 1999].
14-5 SECTION 11. Section 204.0065, Labor Code, is amended to read
14-6 as follows:
14-7 Sec. 204.0065. TEMPORARY INITIAL CONTRIBUTION RATE.
14-8 Notwithstanding Section 204.006, on and after January 1, 1994, a
14-9 person's contribution rate shall be two and six-tenths percent
14-10 until the date the experience rate computed under Section 204.041
14-11 takes effect for the employer. This section expires December 31,
14-12 2001 [ 1999].
14-13 SECTION 12. Section 204.0625, Labor Code, is amended to read
14-14 as follows:
14-15 Sec. 204.0625. TEMPORARY ADJUSTMENT TO REPLENISHMENT TAX
14-16 RATE. On and after January 1, 1994, the replenishment tax rate
14-17 computed under Section 204.062 shall be adjusted to a rate computed
14-18 by subtracting 0.1 from the quotient computed under Section
14-19 204.062(a). This section expires December 31, 2001 [ 1999].
14-20 SECTION 13. Section 204.123, Labor Code, is amended to read
14-21 as follows:
14-22 Sec. 204.123. TRANSFER TO SMART JOBS FUNDS [ FUND] AND
14-23 COMPENSATION FUND. (a) If, on September 1 of a year, the
14-24 commission determines that the amount in the compensation fund will
14-25 exceed 100 percent of its floor as computed under Section 204.061
14-26 on the next October 1 computation date, the commission shall
14-27 transfer from [ the amount in] the holding fund created under
15-1 Section 204.122:
15-2 (1) 80 percent of the amount in the holding fund to
15-3 the smart jobs fund created under Section 481.154(a) [ 481.154],
15-4 Government Code; and
15-5 (2) 20 percent of the amount in the holding fund to
15-6 the smart jobs rainy day fund created under Section 481.154(d),
15-7 Government Code.
15-8 (b) If, on September 1 of a year, the commission determines
15-9 that the amount in the compensation fund will be at or below 100
15-10 percent of its floor as computed under Section 204.061 on the next
15-11 October 1 computation date, the commission shall transfer to the
15-12 compensation fund as much of the amount in the holding fund as is
15-13 necessary to raise the amount in the compensation fund to 100
15-14 percent of its floor, up to and including the entire amount in the
15-15 holding fund. The commission shall transfer any remaining balance
15-16 in the holding fund to the smart jobs fund and smart jobs rainy day
15-17 fund created under Section 481.154, Government Code, in the
15-18 percentages provided by Subsection (a).
15-19 SECTION 14. Section 204.124, Labor Code, is amended to read
15-20 as follows:
15-21 Sec. 204.124. EXPIRATION. This subchapter expires December
15-22 31, 2001 [ 1999].
15-23 SECTION 15. Section 481.155, Government Code, as amended by
15-24 this Act, applies only to a grant awarded by the Texas Department
15-25 of Economic Development on or after January 1, 2000. A grant
15-26 awarded before that date is governed by the law in effect
15-27 immediately before the effective date of this Act, and the former
16-1 law is continued in effect for that purpose.
16-2 SECTION 16. This Act takes effect September 1, 1999.
16-3 SECTION 17. The importance of this legislation and the
16-4 crowded condition of the calendars in both houses create an
16-5 emergency and an imperative public necessity that the
16-6 constitutional rule requiring bills to be read on three several
16-7 days in each house be suspended, and this rule is hereby suspended.