By Lucio                                                S.B. No. 45
         76R2061 PB-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the distribution of certain state and federal job
 1-3     training funds and to the continuation of the smart jobs fund.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5             ARTICLE 1.  APPLICATION TO SMART JOBS FUND PROGRAM
 1-6           SECTION 1.01.  Section 481.152, Government Code, is amended
 1-7     to read as follows:
 1-8           Sec. 481.152.  SMART JOBS FUND PROGRAM; ADMINISTRATION.  (a)
 1-9     The smart jobs fund program is created in the department as a work
1-10     force development incentive program to enhance employment
1-11     opportunities and to meet the needs of existing and new industries
1-12     in this state.
1-13           (b)  [The program shall give priority to the creation and
1-14     retention of family wage jobs and focus on employers in industries
1-15     that promote high-skill, high-wage jobs in high-technology areas
1-16     and on demand occupations that provide those jobs.  At least 60
1-17     percent of the money spent under the program shall be used for
1-18     projects that assist existing employers.]
1-19           [(c)]  The department shall administer the program.
1-20           (c) [(d)]  The executive director may employ personnel as
1-21     necessary to administer the program.
1-22           SECTION 1.02.  Subchapter J, Chapter 481, Government Code, is
1-23     amended by adding Section 481.1525 to read as follows:
1-24           Sec. 481.1525.  PROGRAM PRIORITIES.  (a)  The program shall
 2-1     give priority to the creation and retention of family wage jobs in
 2-2     regions of this state that have high unemployment rates and low per
 2-3     capita income, as determined by the department in conjunction with
 2-4     the Texas Workforce Commission and the comptroller.
 2-5           (b)  To the extent feasible with the priorities established
 2-6     under this subchapter, the program shall focus on employers in
 2-7     industries that promote high-skill, high-wage jobs in
 2-8     high-technology areas and on demand occupations that provide those
 2-9     jobs.  At least 60 percent of the money spent under the program
2-10     shall be used for projects that assist existing employers.
2-11           (c)  The program shall give priority to employment for
2-12     residents of this state.
2-13           SECTION 1.03.  Section 481.155, Government Code, is amended
2-14     to read as follows:
2-15           Sec. 481.155.  GRANTS.  (a)  The executive director may award
2-16     grants for projects that meet the requirements of this chapter.
2-17     The distribution of grants under the program shall be weighted,
2-18     through a formula devised by the department, in favor of regions of
2-19     this state that have high unemployment rates and low per capita
2-20     income, as determined by the department in conjunction with the
2-21     Texas Workforce Commission and the comptroller.   It is the intent
2-22     of the legislature that, to the [greatest] extent feasible with
2-23     this subsection and the priorities established under this
2-24     subchapter [practicable], money from the smart jobs fund shall be
2-25     spent in all areas of the  state.
2-26           (b)  The executive director may award a grant or a
2-27     combination of grants in any fiscal year to a single employer in
 3-1     excess of $1,500,000 or at a rate greater than 10 percent of the
 3-2     annual wages of the new or existing job being created or retained
 3-3     with the grant only if:
 3-4                 (1)  the employer locates or expands in an enterprise
 3-5     zone;
 3-6                 (2)  the employer locates or expands in an adversely
 3-7     affected defense-dependent community;
 3-8                 (3)  the employer locates or expands in an area having
 3-9     an unemployment rate 1 1/2 times greater than the statewide average
3-10     at the time of the application;
3-11                 (4)  the employer locates or expands in a county with a
3-12     population of less than 75,000;
3-13                 (5)  at least 25 percent of the employees hired or
3-14     retained by the employer are economically disadvantaged individuals
3-15     as defined by Section 2303.402(c); or
3-16                 (6)  the employer is a small business or a
3-17     micro-business.
3-18           (c) [(b)]  The executive director shall attempt to ensure
3-19     that at least 20 percent of the total dollar amount of grants
3-20     awarded under the program are awarded to minority employers.
3-21           (d) [(c)]  The program is job-driven.  A grant may not be
3-22     awarded unless each employer participating in the project certifies
3-23     that:
3-24                 (1)  a job or job opening exists or will exist at the
3-25     end of the project for which the grant is sought; and
3-26                 (2)  the job or job opening will be filled by a
3-27     participant in the project.
 4-1           (e) [(d)]  A grant may not be awarded for a project under
 4-2     this section unless each employer participating in the project
 4-3     certifies that the starting wage for a new job created through the
 4-4     project will be equal to or greater than the prevailing wage for
 4-5     that occupation in the local labor market area and that the wage
 4-6     for a job existing on the date that the project is scheduled to
 4-7     begin will be increased to the greater of:
 4-8                 (1)  three percent for a small business or five percent
 4-9     for a business that is not a small business over the wage in effect
4-10     on the day before the date on which the project is scheduled to
4-11     begin for that job; or
4-12                 (2)  100 percent of the prevailing wage for that
4-13     occupation in the local labor market area.
4-14           (f) [(e)]  An employer may apply for a grant under this
4-15     chapter, and an employer who is a micro-business may request a
4-16     modification of the requirements provided by Subsection (e) [(d)]
4-17     and Section 481.159(c), if:
4-18                 (1)  the employer is required to reduce or eliminate
4-19     the employer's work force because of reductions in overall
4-20     employment within an industry;
4-21                 (2)  a substantial change in the skills required to
4-22     continue the employer's business exists because of technological
4-23     changes; or
4-24                 (3)  other reasonable factors, as determined by the
4-25     executive director, exist.
4-26           (g) [(f)]  Grants awarded under this section for which the
4-27     executive director has modified the requirements of Subsection (e)
 5-1     [(d)] may not, in any fiscal year, exceed 10 percent of the total
 5-2     dollar amount of grants awarded under the program in that year.
 5-3           (h) [(g)]  Unless modified by the executive director under
 5-4     rules adopted by the policy board, a grant may not be awarded for a
 5-5     project unless each employer participating in the project certifies
 5-6     that it will continue to spend on nonmanagerial training an amount
 5-7     from private sources equal to the average amount spent by that
 5-8     employer on such training for the most recent two-year period.
 5-9           (i) [(h)]  A grant may not be awarded for a project if the
5-10     project will impair existing contracts for services or collective
5-11     bargaining agreements, except that a project inconsistent with the
5-12     terms of a collective bargaining agreement may be undertaken with
5-13     the written concurrence of the collective bargaining unit and the
5-14     employer or employers who are parties to the agreement.
5-15           (j) [(i)]  During each state fiscal year the executive
5-16     director shall attempt to ensure that at least 50 percent of the
5-17     total dollar amount of grants awarded under this section is awarded
5-18     to small businesses, as defined by Section 481.101.
5-19           [(j)  In awarding a grant under this section, the executive
5-20     director shall give priority to a project that is located in an
5-21     enterprise zone as defined by Section 2303.003.]
5-22           SECTION 1.04.  Section 204.006(a), Labor Code, is amended to
5-23     read as follows:
5-24           (a)  A person's contribution rate for the calendar year in
5-25     which the person becomes an employer is the greater of:
5-26                 (1)  the rate established for that year for the major
5-27     group to which the employer is assigned under Section 204.004; or
 6-1                 (2)  two and six-tenths [seven-tenths] percent.
 6-2           SECTION 1.05.  Sections 481.158 and 481.161, Government Code,
 6-3     are repealed.
 6-4           SECTION 1.06.  Sections 204.0065 and 204.124, Labor Code, are
 6-5     repealed.
 6-6         ARTICLE 2.  APPLICATION TO SKILLS DEVELOPMENT FUND PROGRAM
 6-7           SECTION 2.01.  Chapter 303, Labor Code, is amended by
 6-8     amending Section 303.001 and by adding Section 303.0015 to read as
 6-9     follows:
6-10           Sec. 303.001.  PURPOSE; FUND PRIORITIES [DEFINITION].  (a)
6-11     The purpose of this chapter is to remove administrative barriers
6-12     that impede the response of public community and technical colleges
6-13     and the Texas Engineering Extension Service to industry and
6-14     workforce training needs and to develop incentives for public
6-15     community and technical colleges and the Texas Engineering
6-16     Extension Service to provide customized assessment and training in
6-17     a timely and efficient manner.
6-18           (b)  The skills development fund shall give priority to
6-19     programs in regions of this state that have high unemployment rates
6-20     and low per capita income, as determined by the commission in
6-21     conjunction with the Texas Department of Economic Development and
6-22     the comptroller.
6-23           Sec. 303.0015.  DEFINITION.  In [For purposes of] this
6-24     chapter, "assessment" means the evaluation of an employer's
6-25     workforce needs and requirements.
6-26           SECTION 2.02.  Sections 303.003(d), (e), and (f), Labor Code,
6-27     are amended to read as follows:
 7-1           (d)  The executive director, or a person appointed by the
 7-2     executive director who is knowledgeable in the administration of
 7-3     grants, is responsible for the distribution of money from the
 7-4     skills development fund.  The distribution of money from the fund
 7-5     shall be weighted, through a formula devised by the commission, in
 7-6     favor of regions of this state that have high unemployment rates
 7-7     and low per capita income, as determined by the commission in
 7-8     conjunction with the Texas Department of Economic Development and
 7-9     the comptroller.
7-10           (e)  It is the intent of the legislature that, to the
7-11     greatest extent feasible with the priorities established under this
7-12     chapter [practicable], money from the skills development fund shall
7-13     be spent in all areas of this state.
7-14           (f)  The Texas Engineering Extension Service shall focus the
7-15     service's training activities under this chapter on programs that[:]
7-16                 [(1)  are statewide in nature; or]
7-17                 [(2)]  are not available from a local junior college
7-18     district, a local technical college, or a consortium of junior
7-19     college districts.
7-20      ARTICLE 3.  APPLICATION TO JOB TRAINING PARTNERSHIP ACT PROGRAMS
7-21           SECTION 3.01.  Section 302.062, Labor Code, is amended by
7-22     amending Subsections (b) and (c) and adding Subsection (h) to read
7-23     as follows:
7-24           (b)  In the case of funds that are allocated to this state or
7-25     regions of this state through the application of [established]
7-26     formulas established under federal laws or regulations, the
7-27     commission shall allocate amounts across the state using the same
 8-1     formula that was used to provide the funds to the state or that
 8-2     region.
 8-3           (c)  In the case of funds that are not allocated by formulas
 8-4     established under federal laws or regulations [formula] to this
 8-5     state or regions of this state, the commission shall [develop a
 8-6     need-based formula that will equitably] allocate funds among local
 8-7     workforce development areas throughout this state as provided by
 8-8     Subsection (h).
 8-9           (h)  Unless superseded by federal law, the distribution of
8-10     funds under this section shall be weighted, through a formula
8-11     devised by the commission, in favor of regions of this state that
8-12     have high unemployment rates and low per capita income, as
8-13     determined by the commission in conjunction with the Texas
8-14     Department of Economic Development and the comptroller.
8-15              ARTICLE 4.  TRANSITION; EFFECTIVE DATE; EMERGENCY
8-16           SECTION 4.01.  (a)  Section 481.155, Government Code, as
8-17     amended by this Act, applies only to a grant awarded by the
8-18     executive director of the Texas Department of Economic Development
8-19     on or after January  1, 2000.  A grant awarded before that date is
8-20     governed by the law in effect on the date that the grant
8-21     application was received by the Texas Department of Economic
8-22     Development, and the former law is continued in effect for that
8-23     purpose.    
8-24           (b)  Section 303.003, Labor Code, as amended by this Act,
8-25     applies only to money distributed from the skills development fund
8-26     by the Texas Workforce Commission on or after January  1, 2000.
8-27           (c)  Section 302.062, Labor Code, as amended by this Act,
 9-1     applies only to funds distributed by the Texas Workforce Commission
 9-2     under that section on or after January 1, 2000.
 9-3           SECTION 4.02.  This Act takes effect September 1, 1999.
 9-4           SECTION 4.03.  The importance of this legislation and the
 9-5     crowded condition of the calendars in both houses create an
 9-6     emergency and an imperative public necessity that the
 9-7     constitutional rule requiring bills to be read on three several
 9-8     days in each house be suspended, and this rule is hereby suspended.