1-1     By:  Oliveira, et al. (Senate Sponsor - Sibley)       H.B. No. 3657
 1-2           (In the Senate - Received from the House April 26, 1999;
 1-3     April 27, 1999, read first time and referred to Committee on
 1-4     Economic Development; May 14, 1999, reported adversely, with
 1-5     favorable Committee Substitute by the following vote:  Yeas 4, Nays
 1-6     0; May 14, 1999, sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR H.B. No. 3657                  By:  Sibley
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to the continuation, funding, and operation of certain
1-11     workforce development programs.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13                     ARTICLE 1.  SMART JOBS FUND PROGRAM
1-14           SECTION 1.01.  Section 481.151, Government Code, is amended
1-15     to read as follows:
1-16           Sec. 481.151.  DEFINITIONS.  In this subchapter:
1-17                 (1)  "County average weekly wage" means the average
1-18     weekly wage paid by all employers in a county that are covered by
1-19     unemployment compensation insurance, as determined by the Texas
1-20     Workforce Commission for the most recent period for which data is
1-21     available. ["Business development" includes relocation, expansion,
1-22     turnover, diversification, or technological change.]
1-23                 (2)  ["Demand occupation" means an occupation in which,
1-24     as a result of business development, there are or will be positive
1-25     growth-to-replacement ratios within the next 12 to 24 months,
1-26     according to the best available sources of state and local labor
1-27     market information.]
1-28                 [(3)  "Emerging occupation" means an occupation that
1-29     arises from forces related to technological changes in the
1-30     workplace and the work of which cannot be performed by workers from
1-31     other occupations without at least two months of customized
1-32     education or training.]
1-33                 [(4)]  "Employee" means an individual who performs
1-34     services for another under a contract of hire, whether express or
1-35     implied, or oral or written.
1-36                 (3) [(5)]  "Employer" means a person that employs one
1-37     or more employees.
1-38                 (4) [(6)]  "Executive director" means the executive
1-39     director of the department.
1-40                 (5) [(7)]  "Existing employer" means an employer that:
1-41                       (A)  has been liable to pay contributions under
1-42     Subtitle A, Title 4, Labor Code, [(Texas Unemployment Compensation
1-43     Act)] for more than one year;
1-44                       (B)  has employees; and
1-45                       (C)  is in compliance with the reporting and
1-46     payment requirements of Subtitle A, Title 4, Labor Code [that Act],
1-47     as determined by the Texas Workforce Commission.
1-48                 (6)  "Group health benefit plan" means:
1-49                       (A)  a health plan provided by a health
1-50     maintenance organization established under the Texas Health
1-51     Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
1-52     Code);
1-53                       (B)  a health benefit plan approved by the
1-54     commissioner of insurance; or
1-55                       (C)  a self-funded or self-insured employee
1-56     welfare benefit plan that provides health benefits and is
1-57     established in accordance with the Employee Retirement Income
1-58     Security Act of 1974 (29 U.S.C. Section 1001 et seq.), as amended.
1-59                 (7) [(8)  "Family wage job" means a job that offers:]
1-60                       [(A)  wages equal to or greater than the state
1-61     average weekly wage;]
1-62                       [(B)  benefits, such as vacation leave, sick
1-63     leave, and insurance coverage;]
1-64                       [(C)  reasonable opportunities for continued
 2-1     skill development and career path advancement; and]
 2-2                       [(D)  a substantial likelihood of long-term job
 2-3     security.]
 2-4                 [(9)]  "In-kind contribution" means a noncash
 2-5     contribution of goods and services provided by an employer as all
 2-6     or part of the employer's matching share of a grant or project.
 2-7                 (8) [(10)]  "Job" means employment on a basis
 2-8     customarily considered full-time for the applicable occupation and
 2-9     industry.
2-10                 (9)  "Large business" means a business entity that
2-11     employs at least 500 employees.
2-12                 (10)  "Medium business" means a business entity that
2-13     employs more than 99 but fewer than 500 employees.
2-14                 (11)  ["Manufacturing occupation" means an occupation
2-15     that is involved in the mechanical or chemical transformation of
2-16     materials or substances into new products.]
2-17                 [(12)]  "Micro-business" means a [an eligible] business
2-18     entity that employs [with] not more than 20 employees.
2-19                 (12) [(13)]  "Minority employer" means a business
2-20     entity at least 51 percent of which is owned by minority group
2-21     members or, in the case of a corporation, at least 51 percent of
2-22     the shares of which are owned by minority group members and that:
2-23                       (A)  is managed and, in daily operations, is
2-24     controlled by minority group members; and
2-25                       (B)  is a domestic business entity with a home or
2-26     branch office located in this state and is not a branch or
2-27     subsidiary of a foreign corporation or other foreign business
2-28     entity.
2-29                 (13) [(14)]  "Minority group members" include:
2-30                       (A)  African-Americans;
2-31                       (B)  American Indians;
2-32                       (C)  Asian-Americans;
2-33                       (D)  Mexican-Americans and other Americans of
2-34     Hispanic origin; and
2-35                       (E)  women.
2-36                 (14) [(15)]  "Program" means the smart jobs fund
2-37     program created under this subchapter.
2-38                 (15) [(16)]  "Project" means a specific employment
2-39     training project developed and implemented under this subchapter.
2-40                 (16) [(17)]  "Provider" means a person that provides
2-41     employment-related training.  The term includes employers, employer
2-42     associations, labor organizations, community-based organizations,
2-43     training consultants, public and private schools, technical
2-44     institutes, junior or community colleges, senior colleges,
2-45     universities, and proprietary schools, as defined by Section
2-46     132.001, Education Code.
2-47                 (17)  "Qualified job" means a job for which an
2-48     application has been submitted and that:
2-49                       (A)  pays at least 100 percent of the county
2-50     average weekly wage; and
2-51                       (B)  is covered by a group health benefit plan
2-52     for which the business offers to pay at least 50 percent of the
2-53     premiums or other charges assessed for employee-only coverage under
2-54     the plan, regardless of whether an employee may voluntarily waive
2-55     the coverage.
2-56                 (18)  "Small business" means a business entity that
2-57     employs more than 20 but fewer than 100 employees [has the meaning
2-58     assigned that term by Section 481.101].
2-59                 (19)  ["State average weekly wage" means the annual
2-60     average of the average weekly wage of manufacturing production
2-61     workers in this state as of September 1 of each year, as determined
2-62     by the Texas Workforce Commission, adjusted for regional variances.]
2-63                 [(20)  "Targeted industry" means an industry that
2-64     promotes high-skill, high-wage jobs using Texas-available material
2-65     and human resources, as determined by the department.]
2-66                 [(21)]  "Trainee" means a participant in a project
2-67     funded under this subchapter.
2-68                 (20) [(22)]  "Wages" means all forms of compensation or
2-69     remuneration, excluding benefits, payable for a specific period to
 3-1     an employee for personal services rendered by that employee.
 3-2           SECTION 1.02.  Section 481.152, Government Code, is amended
 3-3     to read as follows:
 3-4           Sec. 481.152.  SMART JOBS FUND PROGRAM; PURPOSE;
 3-5     ADMINISTRATION.  (a)  The smart jobs fund program is created in the
 3-6     department as a work force development incentive program to enhance
 3-7     employment opportunities for residents of this state and to
 3-8     increase the job skills of the [meet the needs of] existing work
 3-9     force by providing job training assistance to businesses operating
3-10     [and new industries] in, or relocating to, this state.
3-11           (b)  The program shall award grants for [give priority to]
3-12     the creation and retention of qualified [family wage] jobs [and
3-13     focus on employers in industries that promote high-skill, high-wage
3-14     jobs in high-technology areas and on demand occupations that
3-15     provide those jobs].  At least 60 percent of the money spent under
3-16     the program shall be used for projects that assist existing
3-17     employers.
3-18           (c)  The governing board by rule shall develop and adopt a
3-19     scoring system that evaluates the economic impact of grant
3-20     applications and reflects the criteria set forth in this
3-21     subchapter.  The executive director shall use the scoring system
3-22     and a competitive process to award grants.  It is the intent of the
3-23     legislature that, to the greatest extent practicable:
3-24                 (1)  money from the smart jobs fund be spent:
3-25                       (A)  in all areas of this state; and
3-26                       (B)  in approximate proportion to each region's
3-27     share of the state's population, civilian labor force, unemployed,
3-28     and submission of grant applications for qualified jobs; and
3-29                 (2)  grants shall be awarded to micro-businesses, small
3-30     businesses, medium businesses, large businesses, and minority
3-31     employers in a manner proportionate to the number of persons
3-32     employed by those categories of businesses.
3-33           (d)  The governing board and the department shall determine
3-34     appropriate means to accomplish the goals of the program.  As
3-35     necessary to implement those goals, the governing board and the
3-36     department may work in conjunction with the Texas Workforce
3-37     Commission and the comptroller.
3-38           (e)  The department shall administer the program.
3-39           (f) [(d)]  The executive director may employ personnel as
3-40     necessary to administer the program.
3-41           (g)  In implementing provisions under this subchapter
3-42     regarding the classification of this state into regions, the
3-43     department shall use the uniform service regions established by the
3-44     comptroller under Section 120, Article V, Chapter 19, Acts of the
3-45     72nd Legislature, 1st Called Session, 1991 (the General
3-46     Appropriations Act).
3-47           SECTION 1.03.  Section 481.153, Government Code, is amended
3-48     to read as follows:
3-49           Sec. 481.153.  RULES.  The governing [policy] board shall
3-50     adopt rules as necessary to implement the program.
3-51           SECTION 1.04.  Section 481.154, Government Code, is amended
3-52     to read as follows:
3-53           Sec. 481.154.  FUNDING; RAINY DAY FUND.  (a)  The smart jobs
3-54     fund is established as a special trust fund in the custody of the
3-55     comptroller separate and apart from all public money or funds of
3-56     this state.  The fund is composed of:
3-57                 (1)  money transferred into the fund under Section
3-58     204.123, Labor Code;
3-59                 (2)  gifts, grants, and other donations received by the
3-60     department for the fund; and
3-61                 (3)  any amounts appropriated by the legislature for
3-62     the program from the general revenue fund.
3-63           (b)  The program is funded through the smart jobs fund.
3-64           (c)  Money in the smart jobs fund may be used for program
3-65     administration, marketing expenses, and evaluation of the program.
3-66     These costs of the department in any fiscal year may not exceed the
3-67     lesser of:
3-68                 (1)  five percent of the total amount appropriated for
3-69     the program for that fiscal year; or
 4-1                 (2)  $1.5 million.
 4-2           (d)  The smart jobs rainy day fund is established as a
 4-3     special trust fund in the custody of the comptroller separate and
 4-4     apart from all public money or funds of this state.  The smart jobs
 4-5     rainy day fund is composed of:
 4-6                 (1)  money transferred to that fund as provided by
 4-7     Section 204.123, Labor Code;
 4-8                 (2)  money returned by employers or recouped by the
 4-9     program under Section 481.159(d); and
4-10                 (3)  any other money received by the governing board
4-11     for deposit in that fund.
4-12           (e)  The governing board may authorize the executive director
4-13     to use money in the smart jobs rainy day fund if:
4-14                 (1)  the governing board determines, after consulting
4-15     with the comptroller, that the smart jobs fund contains
4-16     insufficient money to cover the amounts appropriated by the
4-17     legislature to operate the program; and
4-18                 (2)  the Texas Workforce Commission has determined
4-19     that:
4-20                       (A)  the unemployment rate in this state is 125
4-21     percent of the average unemployment rate in this state during the
4-22     preceding three years; or
4-23                       (B)  a severe economic dislocation is occurring
4-24     in a specific region of this state.
4-25           (f)  The Texas Workforce Commission by rule shall define
4-26     "severe economic dislocation" for purposes of Subsection (e).  In
4-27     adopting a definition, the commission shall consider
4-28     employment-related factors, including:
4-29                 (1)  massive layoffs in a region of this state caused
4-30     by:
4-31                       (A)  the closure of military bases;
4-32                       (B)  the effect of the implementation of the
4-33     North American Free Trade Agreement;
4-34                       (C)  employer relocations; or
4-35                       (D)  other analogous situations; and
4-36                 (2)  the number of jobs lost in a region compared to
4-37     the region's usual rates of employment.
4-38           (g)  If the governing board approves the use of money from
4-39     the smart jobs rainy day fund because of a severe economic
4-40     dislocation occurring in a specific region of the state, the
4-41     executive director may use the money allocated from the smart jobs
4-42     rainy day fund solely for projects located in the affected region.
4-43           (h)  Notwithstanding any other provision of this section, the
4-44     total combined amount spent in any fiscal year from the smart jobs
4-45     fund and the smart jobs rainy day fund may not exceed the amount
4-46     appropriated by the legislature for that fiscal year for the
4-47     operation of the smart jobs fund program.
4-48           (i)  If, during any three consecutive months, the balance in
4-49     the smart jobs fund or the smart jobs rainy day fund exceeds 0.15
4-50     percent of the total taxable wages for the four calendar quarters
4-51     ending the preceding June 30, as computed under Section 204.062(c),
4-52     Labor Code, the executive director shall immediately transfer the
4-53     excess from the applicable fund to the Unemployment Compensation
4-54     Fund created under Section 203.021, Labor Code.
4-55           SECTION 1.05.  Section 481.155, Government Code, is amended
4-56     to read as follows:
4-57           Sec. 481.155.  GRANTS.  (a)  The executive director may award
4-58     grants for projects that meet the requirements of this chapter.
4-59     [It is the intent of the legislature that, to the greatest extent
4-60     practicable, money from the smart jobs fund shall be spent in all
4-61     areas of the state. The executive director may award a grant or a
4-62     combination of grants in any fiscal year to a single employer in
4-63     excess of $1,500,000 or at a rate greater than 10 percent of the
4-64     annual wages of the new or existing job being created or retained
4-65     with the grant only if:]
4-66                 [(1)  the employer locates or expands in an enterprise
4-67     zone;]
4-68                 [(2)  the employer locates or expands in an adversely
4-69     affected defense-dependent community;]
 5-1                 [(3)  the employer locates or expands in an area having
 5-2     an unemployment rate 1-1/2 times greater than the statewide average
 5-3     at the time of the application;]
 5-4                 [(4)  the employer locates or expands in a county with
 5-5     a population of less than 75,000;]
 5-6                 [(5)  at least 25 percent of the employees hired or
 5-7     retained by the employer are economically disadvantaged individuals
 5-8     as defined by Section 2303.402(c); or]
 5-9                 [(6)  the employer is a small business or a
5-10     micro-business.]
5-11           (b)  [The executive director shall attempt to ensure that at
5-12     least 20 percent of the total dollar amount of grants awarded under
5-13     the program are awarded to minority employers.]
5-14           [(c)  The program is job-driven.]  A grant may not be awarded
5-15     unless each employer participating in the project certifies that:
5-16                 (1)  a job or job opening exists or will exist at the
5-17     end of the project for which the grant is sought; and
5-18                 (2)  the job or job opening will be filled by a
5-19     participant in the project.
5-20           (c)  Except as otherwise provided by this subsection, a grant
5-21     may not be awarded unless each employer participating in the
5-22     project certifies that each job under the project is covered by a
5-23     group health benefit plan for which the business pays at least 50
5-24     percent of the premiums or other charges assessed for employee-only
5-25     coverage under the plan.  The executive director may waive the
5-26     coverage requirement for a particular job if the affected employee
5-27     voluntarily waives the coverage in the manner prescribed by rules
5-28     adopted by the governing board.
5-29           (d)  A grant may not be awarded for a project under this
5-30     section unless each employer participating in the project certifies
5-31     that the starting wage for a new job created through the project
5-32     will be equal to or greater than the county average weekly
5-33     [prevailing] wage for the county in which the job or project is
5-34     located [that occupation in the local labor market area] and that
5-35     the wage for a job existing on the date that the project is
5-36     scheduled to begin will be increased to the greater of:
5-37                 (1)  three percent for a micro-business or small
5-38     business or five percent for a business that is not a
5-39     micro-business or small business over the wage in effect on the day
5-40     before the date on which the project is scheduled to begin for that
5-41     job; or
5-42                 (2)  100 percent of the county average weekly
5-43     [prevailing] wage for the county in which the job or project is
5-44     located [that occupation in the local labor market area].
5-45           (e)  An employer may apply for a grant under this chapter.
5-46     An[, and an] employer [who is a micro-business] may request a
5-47     modification of the requirements provided by Subsection (d) and
5-48     Section 481.159(c), if[:]
5-49                 [(1)  the employer is required to reduce or eliminate
5-50     the employer's work force because of reductions in overall
5-51     employment within an industry;]
5-52                 [(2)  a substantial change in the skills required to
5-53     continue the employer's business exists because of technological
5-54     changes; or]
5-55                 [(3)  other] reasonable factors exist for the
5-56     modification, as determined by the executive director[, exist].
5-57           (f)  Grants awarded under this section for which the
5-58     executive director has modified the requirements of Subsection (d)
5-59     may not, in any fiscal year, exceed 10 percent of the total dollar
5-60     amount of grants awarded under the program in that year.
5-61           (g)  Unless modified by the executive director under rules
5-62     adopted by the governing [policy] board, a grant may not be awarded
5-63     for a project unless each employer participating in the project
5-64     certifies that it will continue to spend on nonmanagerial training
5-65     an amount from private sources equal to the average amount spent by
5-66     that employer on such training for the most recent two-year period.
5-67           (h)  A grant may not be awarded for a project if the project
5-68     will impair existing contracts for services or collective
5-69     bargaining agreements, except that a project inconsistent with the
 6-1     terms of a collective bargaining agreement may be undertaken with
 6-2     the written concurrence of the collective bargaining unit and the
 6-3     employer or employers who are parties to the agreement.
 6-4           [(i)  During each state fiscal year the executive director
 6-5     shall attempt to ensure that at least 50 percent of the  total
 6-6     dollar amount of grants awarded under this section is awarded to
 6-7     small businesses, as defined by Section 481.101.]
 6-8           [(j)  In awarding a grant under this section, the executive
 6-9     director shall give priority to a project that is located in an
6-10     enterprise zone as defined by Section 2303.003.]
6-11           SECTION 1.06.  Section 481.156, Government Code, is amended
6-12     to read as follows:
6-13           Sec. 481.156.  GRANT APPLICATION; AWARDING OF GRANTS.  (a)
6-14     The following may apply for a grant under this subchapter:
6-15                 (1)  one or more employers to secure training [for
6-16     demand occupations, emerging occupations, or manufacturing
6-17     occupations];
6-18                 (2)  one or more employers acting in partnership with
6-19     an employer organization, labor organization, or community-based
6-20     organization to secure training [for demand occupations, emerging
6-21     occupations, or manufacturing occupations]; or
6-22                 (3)  one or more employers acting in partnership with a
6-23     consortium composed of more than one provider to secure training
6-24     [for demand occupations, emerging occupations, or manufacturing
6-25     occupations].
6-26           (b)  A grant application must be filed with the department in
6-27     a form approved by the executive director and, except as provided
6-28     by Subsection (c), must include a complete business and training
6-29     plan, including:
6-30                 (1)  the number and kind of jobs available;
6-31                 (2)  the skills and competencies required for the
6-32     identified jobs;
6-33                 (3)  the wages to be paid to trainees on successful
6-34     completion of the project;
6-35                 (4)  the goals, objectives, and outcome measures for
6-36     the project;
6-37                 (5)  the proposed curriculum for the project; and
6-38                 (6)  the projected cost per person enrolled, trained,
6-39     hired, and retained in employment.
6-40           (c)  The governing board by rule may exempt a micro-business
6-41     from the requirement to submit a business and training plan that
6-42     complies with Subsection (b).  The governing board by rule shall
6-43     establish a simplified application process for grant applications
6-44     from micro-businesses.
6-45           (d) [(c)]  The department may provide assistance with the
6-46     application process to all applicants and shall give priority to
6-47     assisting applicants who are small businesses or micro-businesses
6-48     [in formulating the business and training plan required under
6-49     Subsection (b)].
6-50           (e) [(d)]  The department shall minimize the length of the
6-51     application form and shall simplify as much as possible the review
6-52     process for grant applications.
6-53           (f)  The department shall notify each applicant as to whether
6-54     the application is complete not later than the fifth business day
6-55     after the date on which the application is received by the
6-56     department.  [(e)  The executive director shall act on a completed
6-57     application not later than the 30th day after the date on which the
6-58     application is filed with the department.]
6-59           SECTION 1.07.  Subchapter J, Chapter 481, Government Code, is
6-60     amended by adding Section 481.1565 to read as follows:
6-61           Sec. 481.1565.  PARTICIPATION IN ADDITIONAL PROGRAMS;
6-62     APPLICATION REQUIREMENTS.  (a)  A business may not apply both for a
6-63     grant under this subchapter and to a public community or technical
6-64     college for customized training and assessment from the college
6-65     through a grant issued to the college under the skills development
6-66     fund program established under Chapter 303, Labor Code, unless the
6-67     business and the college file an application for concurrent
6-68     participation in both programs.
6-69           (b)  The Texas Workforce Commission and the governing board
 7-1     by rule shall jointly establish the requirements for an application
 7-2     subject to this section.
 7-3           SECTION 1.08.  Section 481.157(b), Government Code, is
 7-4     amended to read as follows:
 7-5           (b)  The governing [policy] board may adopt rules modifying
 7-6     the requirements of Subsection (a)  for employers that are small
 7-7     businesses or micro-businesses [with fewer than 50 employees] and
 7-8     may also adopt rules modifying the requirements of Subsection (a)
 7-9     for projects that provide significant economic benefits to an
7-10     entire region of the state.
7-11           SECTION 1.09.  Section 481.159, Government Code, is amended
7-12     by amending Subsections (a) and (c) and adding Subsection (d) to
7-13     read as follows:
7-14           (a)  The executive director may approve any project that
7-15     meets the requirements of this subchapter.  If [the executive
7-16     director approves] a project is approved and funds are available,
7-17     the department shall enter into a contract with the grant applicant
7-18     and with each employer participating in the project.  The contract
7-19     must specify those skills and competencies to be gained as a result
7-20     of the project.
7-21           (c)  Each contract must provide a schedule for payment of
7-22     smart jobs fund money.  Twenty-five percent of allowable
7-23     expenditures shall be withheld by the department for 90 days after
7-24     the date of completion of the contract.  If at least 85 percent of
7-25     the trainees in the project have been retained in employment for
7-26     that 90-day period, other than trainees who leave the employment
7-27     voluntarily for better-paying jobs, and have successfully achieved
7-28     the skills and competencies, wage requirements, and other
7-29     contractual obligations, the amount of allowable expenditures
7-30     withheld shall be remitted to the employer.  The governing board by
7-31     rule shall establish procedures as necessary to verify that a
7-32     trainee has left the employment for a better-paying job.  If there
7-33     is a negative balance, the employer is liable for the amount of the
7-34     negative balance and shall remit that amount to the department not
7-35     later than the 30th day after the date on which the employer is
7-36     notified of the negative balance by the department.
7-37           (d)  Each contract must state the term of the grant award.  A
7-38     grant recipient who does not use all money awarded under the grant
7-39     for the prescribed purpose within the allotted term shall reimburse
7-40     the program by submitting the appropriate amount to the executive
7-41     director not later than the 30th day after the expiration date of
7-42     the term of the grant award.  The executive director shall remit
7-43     money received under this subsection to the comptroller for deposit
7-44     in the smart jobs rainy day fund.
7-45           SECTION 1.10.  Section 481.160, Government Code, is amended
7-46     by amending Subsection (b) and adding Subsection (c) to read as
7-47     follows:
7-48           (b)  The annual report must include for that fiscal year:
7-49                 (1)  the total number of applications submitted, the
7-50     total number of applications approved, and the total number of
7-51     applications rejected, reported by region of the state and by size
7-52     of business;
7-53                 (2)  the number of employers receiving grants under the
7-54     program reported by region of the state and the percentage that
7-55     number represents of the total number of employers receiving grants
7-56     under the program on a statewide basis;
7-57                 (3) [(2)]  the total amount of money [grants] awarded
7-58     in each region of the state and the percentage that amount
7-59     represents of the total amount of money awarded on a statewide
7-60     basis;
7-61                 (4)  a comparison of the percentage of total dollars
7-62     awarded to each region versus each region's percentage of:
7-63                       (A)  the state's population;
7-64                       (B)  the civilian labor force;
7-65                       (C)  the number of unemployed persons; and
7-66                       (D)  the number of eligible grant applications
7-67     for qualified jobs submitted to the department;
7-68                 (5) [(3)]  the value, expressed in dollars and as a
7-69     percentage of total training expenditures, of matching
 8-1     contributions made by employers;
 8-2                 (6) [(4)]  the number of [small] businesses, classified
 8-3     by micro-businesses, small businesses, medium businesses, and large
 8-4     businesses [as defined by Section 481.101(3)], that receive grants
 8-5     under the program reported by region of the state and business size
 8-6     and the percentage that number represents of the total number of
 8-7     each of those categories of businesses receiving grants under the
 8-8     program on a statewide basis;
 8-9                 (7)  [and] the total amount of money [the grants]
8-10     awarded to micro-businesses, small businesses, medium businesses,
8-11     and large businesses, reported by region of the state and business
8-12     size, and the percentage that amount represents of the total amount
8-13     of money awarded to those businesses on a statewide basis;
8-14                 (8) [(5)]  the number of businesses located in
8-15     enterprise zones, as that term is defined by Chapter 2303, that
8-16     receive grants under the program and the total amount of the grants
8-17     awarded to those businesses;
8-18                 (9) [(6)  the geographical distribution of employers
8-19     receiving grants under the program;]
8-20                 [(7)]  the total number of jobs created, enhanced, or
8-21     retained under the program:
8-22                       (A)  [, reported] by region of the state;
8-23                       (B)  [and] by occupation, classified by the
8-24     applicable two-digit standard industrial classification;
8-25                       (C)  by wage level; and
8-26                       (D)  whether attributable to:
8-27                             (i)  relocation of businesses to this
8-28     state, including the percentage the number attributable to the
8-29     relocation of businesses represents of the total number of jobs
8-30     created, enhanced, or retained under the program on a statewide
8-31     basis; or
8-32                             (ii)  training or retraining of employees
8-33     of existing employers, including the percentage that the number
8-34     attributable to the training or retraining of employees of existing
8-35     employers represents of the total number of jobs created, enhanced,
8-36     or retained under the program on a statewide basis;
8-37                 (10) [(8)]  the average and median weekly wage levels
8-38     of trainees entering or returning to the workforce, broken down by
8-39     current employees undergoing retraining and new hires, at three
8-40     months and one year after the conclusion of their training;
8-41                 (11) [(9)]  the number and percentage of participating
8-42     employers that provide workers' compensation insurance coverage and
8-43     the number and percentage of employees covered;
8-44                 (12) [(10)  the number and percentage of participating
8-45     employers that offer health care insurance coverage and] the number
8-46     and percentage of employees covered by the group health benefit
8-47     plan offered by the employer;
8-48                 (13) [(11)]  the number and percentage of women,
8-49     disabled persons, [employers] and minority group members
8-50     [employers] receiving grants under the program as employers,
8-51     participating as trainees in training projects, or participating in
8-52     the program as providers [and the total amount of the grants
8-53     awarded], broken out by group;
8-54                 (14)  a list of modifications granted under Section
8-55     481.155(e), the name of the project for which the modification was
8-56     granted, and the reason the executive director granted the
8-57     modification [(12)  the number and percentage of women, minority
8-58     group members, and disabled individuals participating as trainees
8-59     in training projects, broken out by group]; and
8-60                 (15)  the number of trainees who have left employment
8-61     with a grant recipient because the trainee has obtained a
8-62     better-paying job, as verified under Section 481.159(c) [(13)  the
8-63     number and percentage of women private providers and private
8-64     providers who are minority group members utilized by employers in
8-65     training projects, broken out by group].
8-66           (c)  In addition to the information required under Subsection
8-67     (b), the department shall include in the annual report, for each
8-68     region of the state in which a grant is awarded, the percentage
8-69     paid by employers in that region of the total amount of
 9-1     unemployment insurance contributions paid by employers during the
 9-2     preceding calendar year.
 9-3           SECTION 1.11.  Section 481.161, Government Code, is amended
 9-4     to read as follows:
 9-5           Sec. 481.161.  EXPIRATION.  This subchapter expires December
 9-6     31, 2001 [1999].
 9-7                     ARTICLE 2.  SKILLS DEVELOPMENT FUND
 9-8           SECTION 2.01.  Section 303.003(a), Labor Code, is amended to
 9-9     read as follows:
9-10           (a)  To achieve the purposes of this chapter, the skills
9-11     development fund is created.  The fund is composed of:
9-12                 (1)  money transferred into the fund under Section
9-13     204.123; and
9-14                 (2)  any amounts appropriated by the legislature for
9-15     the purpose of this chapter from [money in] the general revenue
9-16     fund.
9-17           SECTION 2.02.  Chapter 303, Labor Code, is amended by adding
9-18     Sections 303.005 and 303.006 to read as follows:
9-19           Sec. 303.005.  PARTICIPATION IN ADDITIONAL PROGRAMS;
9-20     APPLICATION REQUIREMENTS.  An employer may not apply both  to a
9-21     public community or technical college for customized training and
9-22     assessment from the college through a grant issued to the college
9-23     under the skills development fund program established under this
9-24     chapter and for a grant under the smart jobs fund program
9-25     established under Subchapter J, Chapter 481, Government Code,
9-26     unless the employer and the college file an application for
9-27     concurrent participation in both programs that complies with
9-28     Section 481.1565, Government Code.
9-29           Sec. 303.006.  REPORTING REQUIREMENTS.  (a)  In this section:
9-30                 (1)  "Employee" means an individual who performs
9-31     services for another under a contract of hire, whether express or
9-32     implied, or oral or written.
9-33                 (2)  "Employer" means a person that employs one or more
9-34     employees.
9-35                 (3)  "Existing employer" means an employer that:
9-36                       (A)  has been liable to pay contributions under
9-37     Subtitle A, Title 4, for more than one year;
9-38                       (B)  has employees; and
9-39                       (C)  is in compliance with the reporting and
9-40     payment requirements of Subtitle A, Title 4, as determined by the
9-41     Texas Workforce Commission.
9-42                 (4)  "In-kind contribution" means a noncash
9-43     contribution of goods and services provided by an employer as all
9-44     or part of the employer's matching share of a grant or project.
9-45                 (5)  "Job" means employment on a basis customarily
9-46     considered full-time for the applicable occupation and industry.
9-47                 (6)  "Large employer" means a business entity that
9-48     employs at least 500 employees.
9-49                 (7)  "Medium employer" means a business entity that
9-50     employs more than 99 but fewer than 500 employees.
9-51                 (8)  "Micro-employer" means a business entity that
9-52     employs not more than 20 employees.
9-53                 (9)  "Program" means the skills development fund
9-54     program created under this chapter.
9-55                 (10)  "Small employer" means a business entity that
9-56     employs more than 20 but fewer than 100 employees.
9-57                 (11)  "Trainee" means a participant in a project funded
9-58     under this chapter.
9-59                 (12)  "Wages" means all forms of compensation or
9-60     remuneration, excluding benefits, payable for a specific period to
9-61     an employee for personal services rendered by that employee.
9-62           (b)  In implementing provisions under this section regarding
9-63     the classification of this state into regions, the executive
9-64     director shall use the uniform service regions established by the
9-65     comptroller under Section 120, Article V, Chapter 19, Acts of the
9-66     72nd Legislature, 1st Called Session, 1991 (the General
9-67     Appropriations Act).
9-68           (c)  The executive director shall report to the governor and
9-69     the legislature at the end of each fiscal year the status of the
 10-1    program established under this chapter.
 10-2          (d)  The annual report must include for that fiscal year:
 10-3                (1)  the total number of applications submitted, the
 10-4    total number of applications approved, and the total number of
 10-5    applications rejected by region of the state;
 10-6                (2)  the average and median weekly wage levels of
 10-7    trainees under this chapter entering or returning to the workforce,
 10-8    broken down by:
 10-9                      (A)  current employees undergoing retraining;
10-10                      (B)  new hires; and
10-11                      (C)  region of the state;
10-12                (3)  the average and median weekly wage levels of
10-13    trainees under this chapter entering or returning to the workforce,
10-14    broken down by region of the state;
10-15                (4)  the number and percentage of trainees covered by
10-16    health care insurance coverage, workers' compensation insurance
10-17    coverage, and other analogous benefit programs;
10-18                (5)  the total amount of money awarded in each region
10-19    of the state and the percentage that amount represents of the total
10-20    amount of money awarded on a statewide basis;
10-21                (6)  a comparison of the percentage of total dollars
10-22    awarded to each region versus each region's percentage of:
10-23                      (A)  the state's population;
10-24                      (B)  the civilian labor force;
10-25                      (C)  the number of unemployed persons; and
10-26                      (D)  the number of qualified grant applications
10-27    submitted to the commission by public community and technical
10-28    colleges;
10-29                (7)  the total amount of money awarded to
10-30    micro-employers, small employers, medium employers, and large
10-31    employers, reported by region of the state; and
10-32                (8)  the total number of jobs created or persons
10-33    retrained under the program:
10-34                      (A)  by region of the state;
10-35                      (B)  by occupation classified by the two-digit
10-36    standard industrial classification;
10-37                      (C)  by wage level; and
10-38                      (D)  whether attributable to:
10-39                            (i)  relocation of businesses to this
10-40    state; or
10-41                            (ii)  training or retraining of employees
10-42    of existing employers.
10-43          ARTICLE 3.  STUDY OF WORKFORCE PROGRAMS BY COMPTROLLER
10-44          SECTION 3.01.  Chapter 403, Government Code, is amended by
10-45    adding Subchapter N to read as follows:
10-46      SUBCHAPTER N.  STUDY OF CERTAIN WORKFORCE DEVELOPMENT PROGRAMS
10-47          Sec. 403.351.  PERFORMANCE EVALUATION.  (a)  The comptroller
10-48    shall perform a biennial performance evaluation of:
10-49                (1)  the smart jobs fund program established under
10-50    Subchapter J, Chapter 481; and
10-51                (2)  the skills development fund program established
10-52    under Chapter 303, Labor Code.
10-53          (b)  The evaluation must include:
10-54                (1)  an analysis of the wage levels of trainees one
10-55    year and three years after the end of the trainees' participation
10-56    in the programs;
10-57                (2)  information relating to the number of trainees
10-58    employed in the same field after one year and three years;
10-59                (3)  a survey and analysis of program satisfaction from
10-60    former grant recipients;
10-61                (4)  a description of the overall impact of the
10-62    programs on economic development in this state in general and on
10-63    economically distressed areas of this state in particular; and
10-64                (5)  any additional information determined to be
10-65    necessary by the comptroller to analyze the performance and impact
10-66    of the programs.
10-67          (c)  In performing the evaluation required by this section,
10-68    the comptroller shall also analyze the efficiency of the programs
10-69    subject to this section and the use of administrative funds by
 11-1    those programs.
 11-2          (d)  The Texas Department of Economic Development, the Texas
 11-3    Workforce Commission, and the State Occupational Information
 11-4    Coordinating Committee shall cooperate with the comptroller in
 11-5    implementing this section.
 11-6                     ARTICLE 4.  CONFORMING AMENDMENTS
 11-7          SECTION 4.01.  Section 204.0065, Labor Code, is amended to
 11-8    read as follows:
 11-9          Sec. 204.0065.  TEMPORARY INITIAL CONTRIBUTION RATE.
11-10    Notwithstanding Section 204.006, on and after January 1, 1994, a
11-11    person's contribution rate shall be two and six-tenths percent
11-12    until the date the experience rate computed under Section 204.041
11-13    takes effect for the employer.  This section expires December 31,
11-14    2001 [1999].
11-15          SECTION 4.02.  Section 204.0625, Labor Code, is amended to
11-16    read as follows:
11-17          Sec. 204.0625.  TEMPORARY ADJUSTMENT TO REPLENISHMENT TAX
11-18    RATE.  On and after January 1, 1994, the replenishment tax rate
11-19    computed under Section 204.062 shall be adjusted to a rate computed
11-20    by subtracting 0.1 from the quotient computed under Section
11-21    204.062(a).  This section expires December 31, 2001 [1999].
11-22          SECTION 4.03.  Section 204.123, Labor Code, is amended to
11-23    read as follows:
11-24          Sec. 204.123.  TRANSFER TO SMART JOBS FUNDS, SKILLS
11-25    DEVELOPMENT FUND, AND COMPENSATION FUND.  (a)  If, on September 1
11-26    of a year, the commission determines that the amount in the
11-27    compensation fund will exceed 100 percent of its floor as computed
11-28    under Section 204.061 on the next October 1 computation date, the
11-29    commission shall transfer from [the amount in] the holding fund
11-30    created under Section 204.122:
11-31                (1)  50 percent of the amount in the holding fund to
11-32    the smart jobs fund created under Section 481.154(a) [481.154],
11-33    Government Code;
11-34                (2)  30 percent of the amount in the holding fund to
11-35    the skills development fund created under Section 303.003; and
11-36                (3)  20 percent of the amount in the holding fund to
11-37    the smart jobs rainy day fund created under Section 481.154(d),
11-38    Government Code.
11-39          (b)  If, on September 1 of a year, the commission determines
11-40    that the amount in the compensation fund will be at or below 100
11-41    percent of its floor as computed under Section 204.061 on the next
11-42    October 1 computation date, the commission shall transfer to the
11-43    compensation fund as much of the amount in the holding fund as is
11-44    necessary to raise the amount in the compensation fund to 100
11-45    percent of its floor, up to and including the entire amount in the
11-46    holding fund.  The commission shall transfer any remaining balance
11-47    in the holding fund to the smart jobs fund, the skills development
11-48    fund, and the smart jobs rainy day fund in the percentages
11-49    prescribed by Subsection (a) [created under Section 481.154,
11-50    Government Code].
11-51          (c)  Notwithstanding Subsection (a), if, on September 1,
11-52    1999, the commission determines that the amount in the compensation
11-53    fund will exceed 100 percent of its floor as computed under Section
11-54    204.061 on the next October 1 computation date, the commission
11-55    shall transfer from the holding fund created under Section 204.122:
11-56                (1)  14 percent of the amount in the holding fund to
11-57    the smart jobs fund created under Section 481.154(a), Government
11-58    Code;
11-59                (2)  66 percent of the amount in the holding fund to
11-60    the skills development fund created under Section 303.003; and
11-61                (3)  20 percent of the amount in the holding fund to
11-62    the smart jobs rainy day fund created under Section 481.154(d),
11-63    Government Code.
11-64          (d)  Subsection (c) and this subsection expire October 2,
11-65    1999.
11-66          SECTION 4.04.  Section 204.124, Labor Code, is amended to
11-67    read as follows:
11-68          Sec. 204.124.  EXPIRATION.  This subchapter expires December
11-69    31, 2001 [1999].
 12-1             ARTICLE 5.  TRANSITION; EFFECTIVE DATE; EMERGENCY
 12-2          SECTION 5.01.  Section 481.155, Government Code, as amended
 12-3    by this Act, applies only to a grant awarded by the Texas
 12-4    Department of Economic Development on or after January  1, 2000.  A
 12-5    grant awarded before that date is governed by the law in effect
 12-6    immediately before the effective date of this Act, and the former
 12-7    law is continued in effect for that purpose.
 12-8          SECTION 5.02.  Section 481.159(d), Government Code, as added
 12-9    by this Act, applies to reimbursement by an employer of money
12-10    awarded under a grant awarded before, on, or after September 1,
12-11    1999.
12-12          SECTION 5.03.  This Act takes effect September 1, 1999.
12-13          SECTION 5.04.  The importance of this legislation and the
12-14    crowded condition of the calendars in both houses create an
12-15    emergency and an imperative public necessity that the
12-16    constitutional rule requiring bills to be read on three several
12-17    days in each house be suspended, and this rule is hereby suspended.
12-18                                 * * * * *