By Harris S.B. No. 423
76R5051 CMR-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the operation, funding, and administration of certain
1-3 workforce development programs.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 302, Labor Code, is amended by adding
1-6 Subchapter E to read as follows:
1-7 SUBCHAPTER E. SMART JOBS PROGRAM
1-8 Sec. 302.081. DEFINITIONS. In this subchapter:
1-9 (1) "Business development" includes relocation,
1-10 expansion, turnover, diversification, or technological change.
1-11 (2) "Employee" means a person who performs services
1-12 for another under a contract of hire, whether express or implied,
1-13 or oral or written.
1-14 (3) "Employer" means a person who employs one or more
1-15 employees in the private sector.
1-16 (4) "Existing employer" means an employer who:
1-17 (A) has been liable to pay contributions under
1-18 Subtitle A for more than one year;
1-19 (B) has employees; and
1-20 (C) is in compliance with the reporting and
1-21 payment requirements of Subtitle A as determined by the commission.
1-22 (5) "In-kind contribution" means a noncash
1-23 contribution of goods and services provided by an employer as all
1-24 or part of the employer's matching share of a grant or project.
2-1 (6) "Job" means employment on a basis customarily
2-2 considered full-time for the applicable occupation and industry.
2-3 (7) "Minority employer" means a business entity at
2-4 least 51 percent of which is owned by minority group members or, in
2-5 the case of a corporation, at least 51 percent of the shares of
2-6 which are owned by minority group members and that:
2-7 (A) is managed and, in daily operations, is
2-8 controlled by minority group members; and
2-9 (B) is a domestic business entity with a home or
2-10 branch office located in this state and is not a branch or
2-11 subsidiary of a foreign corporation or other foreign business
2-12 entity.
2-13 (8) "Minority group members" include:
2-14 (A) African Americans;
2-15 (B) American Indians;
2-16 (C) Asian Americans;
2-17 (D) Mexican Americans and other Americans of
2-18 Hispanic origin; and
2-19 (E) women.
2-20 (9) "Program" means the smart jobs program created
2-21 under this subchapter.
2-22 (10) "Project" means a specific employment training
2-23 project developed and implemented under this subchapter.
2-24 (11) "Provider" means a person who provides
2-25 employment-related training. The term includes:
2-26 (A) an employer;
2-27 (B) an employer association;
3-1 (C) a labor organization;
3-2 (D) a community-based organization;
3-3 (E) a training consultant;
3-4 (F) a public or private school;
3-5 (G) a proprietary school, as defined by Section
3-6 132.001, Education Code;
3-7 (H) a technical institute;
3-8 (I) a junior or community college;
3-9 (J) a senior college or university; or
3-10 (K) any governmental entity.
3-11 (12) "Small employer" means an employer that employs
3-12 fewer than 50 employees.
3-13 (13) "State average weekly wage" means the annual
3-14 average of the average weekly wage of manufacturing production
3-15 workers in this state as of September 1 of each year, as determined
3-16 by the Texas Workforce Commission, adjusted for regional variances.
3-17 (14) "Trainee" means a participant in a project funded
3-18 under this subchapter.
3-19 (15) "Wages" means all forms of compensation or
3-20 remuneration, excluding benefits, payable for a specific period to
3-21 an employee for personal services rendered by that employee.
3-22 Sec. 302.082. SMART JOBS PROGRAM; ADMINISTRATION. (a) The
3-23 smart jobs program is created in the division as a workforce
3-24 development incentive program to enhance employment opportunities
3-25 and to meet the needs of existing and new industries in this state.
3-26 (b) The program shall give priority to jobs with:
3-27 (1) small employers;
4-1 (2) employers in industries involved in interstate
4-2 business development; and
4-3 (3) employers in industries that promote high-skill,
4-4 high-wage jobs in high-technology areas.
4-5 (c) The program shall encourage the creation and retention
4-6 of jobs that pay at least the state average weekly wage. At least
4-7 60 percent of the money spent under the program shall be used for
4-8 projects that assist existing employers.
4-9 (d) The division shall administer the program.
4-10 (e) The director may employ personnel as necessary to
4-11 administer the program.
4-12 Sec. 302.083. RULES. The commission shall adopt rules as
4-13 necessary to implement the program.
4-14 Sec. 302.084. FUNDING. (a) The smart jobs fund is
4-15 established as a special trust fund in the custody of the
4-16 comptroller separate and apart from all public money or funds of
4-17 this state. The fund is composed of:
4-18 (1) money transferred into the fund under Section
4-19 204.123;
4-20 (2) gifts, grants, and other donations received by the
4-21 department for the fund; and
4-22 (3) any amounts appropriated by the legislature for
4-23 the program.
4-24 (b) The program is funded through the smart jobs fund.
4-25 (c) Money in the smart jobs fund may be used for program
4-26 administration, marketing expenses, and evaluation of the program.
4-27 These costs of the division in any fiscal year may not exceed five
5-1 percent of the total amount appropriated for the program for that
5-2 year.
5-3 (d) If, during any three consecutive months, the balance in
5-4 the smart jobs fund exceeds 0.15 percent of the total taxable wages
5-5 for the four calendar quarters ending the preceding June 30 as
5-6 computed under Section 204.062(c), the director shall immediately
5-7 transfer the excess to the unemployment compensation fund created
5-8 under Section 203.021.
5-9 Sec. 302.085. GRANTS. (a) The director may award grants for
5-10 projects that meet the requirements of this subchapter. It is the
5-11 intent of the legislature that, to the greatest extent practicable,
5-12 money from the smart jobs fund shall be spent in all areas of the
5-13 state. The director may not award a grant or a combination of
5-14 grants in any fiscal year to a single employer in excess of
5-15 $1,500,000 or at a rate greater than 10 percent of the annual wages
5-16 of the new or existing job being created or retained with the
5-17 grant.
5-18 (b) The director shall attempt to ensure that at least 20
5-19 percent of the total dollar amount of grants awarded under the
5-20 program are awarded to minority employers.
5-21 (c) A grant may not be awarded unless each employer
5-22 participating in the project certifies that:
5-23 (1) a job or job opening exists or will exist at the
5-24 end of the project for which the grant is sought; and
5-25 (2) the job or job opening will be filled by a
5-26 participant in the project.
5-27 (d) A grant may not be awarded for a project under this
6-1 section unless each employer participating in the project certifies
6-2 that the starting wage for a new job created through the project
6-3 will be equal to or greater than the prevailing wage for that
6-4 occupation in the local labor market area and that the wage for a
6-5 job existing on the date that the project is scheduled to begin
6-6 will be increased to the greater of:
6-7 (1) three percent for a small employer or five percent
6-8 for an employer who is not a small employer over the wage in effect
6-9 on the day before the date on which the project is scheduled to
6-10 begin for that job; or
6-11 (2) 100 percent of the prevailing wage for that
6-12 occupation in the local labor market area.
6-13 (e) The director may modify the requirements of Subsection
6-14 (d) as authorized by rules adopted by the commission, except that
6-15 grants awarded under this section for which the director has
6-16 modified those requirements may not, in any fiscal year, exceed
6-17 five percent of the total dollar amount of grants awarded under the
6-18 program in that year.
6-19 (f) Unless modified by the director under rules adopted by
6-20 the commission, a grant may not be awarded for a project unless
6-21 each employer participating in the project certifies that the
6-22 employer will continue to spend on nonmanagerial training an amount
6-23 from private sources equal to the average amount spent by that
6-24 employer on such training for the most recent two-year period.
6-25 (g) A grant may not be awarded for a project if the project
6-26 will impair existing contracts for services or collective
6-27 bargaining agreements, except that a project inconsistent with the
7-1 terms of a collective bargaining agreement may be undertaken with
7-2 the written concurrence of the collective bargaining unit and the
7-3 employer or employers who are parties to the agreement.
7-4 (h) During each state fiscal year the director shall ensure
7-5 that at least 50 percent of the total dollar amount of grants
7-6 awarded under this section is awarded to small employers.
7-7 Sec. 302.086. GRANT APPLICATION. (a) The following may
7-8 apply for a grant under this subchapter:
7-9 (1) a small employer to secure training for
7-10 occupations created or affected by the small employer's business;
7-11 (2) one or more employers to secure training for
7-12 occupations created or affected by interstate business development;
7-13 (3) one or more employers acting in partnership with
7-14 an employer organization, labor organization, or community-based
7-15 organization to secure training for occupations created or affected
7-16 by interstate business development; or
7-17 (4) one or more employers acting in partnership with a
7-18 consortium composed of more than one provider to secure training
7-19 for occupations created or affected by interstate business
7-20 development.
7-21 (b) A grant application must be filed with the division in a
7-22 form approved by the director and must include a complete business
7-23 and training plan, including:
7-24 (1) the number and kind of jobs available;
7-25 (2) the skills and competencies required for the
7-26 identified jobs;
7-27 (3) the wages to be paid to trainees on successful
8-1 completion of the project;
8-2 (4) the goals, objectives, and outcome measures for
8-3 the project;
8-4 (5) the proposed curriculum for the project; and
8-5 (6) the projected cost per person enrolled, trained,
8-6 hired, and retained in employment.
8-7 (c) The division may provide assistance to applicants in
8-8 formulating the business and training plan required under
8-9 Subsection (b).
8-10 (d) The division shall minimize the length of the
8-11 application form.
8-12 (e) The director shall act on a completed application not
8-13 later than the 30th day after the date on which the application is
8-14 filed with the division.
8-15 Sec. 302.087. MATCHING REQUIREMENTS; EXEMPTIONS. (a)
8-16 Money provided under a grant for a project must be matched by
8-17 private funds provided by the employer benefiting from the project
8-18 in an amount at least equal to the amount provided by the grant.
8-19 (b) The commission may adopt rules modifying the
8-20 requirements of Subsection (a) for small employers and may also
8-21 adopt rules modifying the requirements of Subsection (a) for
8-22 projects that provide significant economic benefits to an entire
8-23 region of the state.
8-24 (c) Employer matches may include documented in-kind
8-25 contributions as well as wages paid to trainees during the training
8-26 period.
8-27 Sec. 302.088. TRAINEES. The program shall give priority to
9-1 residents of this state, including:
9-2 (1) residents formerly sentenced to the institutional
9-3 division or the state jail division of the Texas Department of
9-4 Criminal Justice; and
9-5 (2) residents participating in Project RIO and other
9-6 programs that provide services to at-risk youths.
9-7 Sec. 302.089. CONTRACTS. (a) The director may approve any
9-8 project that meets the requirements of this subchapter. If the
9-9 director approves a project and funds are available, the division
9-10 shall enter into a contract with the grant applicant and with each
9-11 employer participating in the project. The contract must specify
9-12 those skills and competencies to be gained as a result of the
9-13 project.
9-14 (b) Reimbursable costs in the contract may include only
9-15 those expenses related to direct training in job-related basic
9-16 skills, including literacy skills, job-related vocational skills,
9-17 and administrative costs. Total administrative costs for any
9-18 particular project may not exceed 10 percent of the project's
9-19 expenditures.
9-20 (c) Each contract must provide a schedule for payment of
9-21 smart jobs fund money. The division shall withhold 25 percent of
9-22 allowable expenditures for 90 days after the date of completion of
9-23 the contract. If at least 85 percent of the trainees in the project
9-24 have been retained in employment for that 90-day period and have
9-25 successfully achieved the skills and competencies, wage
9-26 requirements, and other contractual obligations, the division shall
9-27 remit the amount of allowable expenditures withheld to the
10-1 employer. If there is a negative balance, the employer is liable
10-2 for the amount of the negative balance and shall remit that amount
10-3 to the division not later than the 30th day after the date on which
10-4 the employer is notified of the negative balance by the division.
10-5 Sec. 302.090. ANNUAL REPORT. (a) The director shall report
10-6 to the commission quarterly on the status of the program. The
10-7 commission shall report to the governor and the legislature at the
10-8 end of each fiscal year on the status of the program.
10-9 (b) The commission's annual report must include for that
10-10 fiscal year:
10-11 (1) the total number of grant applicants under the
10-12 program, reported by region of the state;
10-13 (2) the number of employers receiving grants under the
10-14 program;
10-15 (3) the total amount of grants awarded;
10-16 (4) the value, expressed in dollars and as a
10-17 percentage of total training expenditures, of matching
10-18 contributions made by employers;
10-19 (5) the number of small businesses that receive grants
10-20 under the program and the total amount of the grants awarded to
10-21 those businesses;
10-22 (6) the geographical distribution of employers
10-23 receiving grants under the program;
10-24 (7) the total number of jobs created, enhanced, or
10-25 retained under the program, reported by region of the state and by
10-26 occupation;
10-27 (8) the wage levels of trainees entering or returning
11-1 to the workforce, broken down by current employees undergoing
11-2 retraining and new hires, at three months and one year after the
11-3 conclusion of their training;
11-4 (9) the number and percentage of participating
11-5 employers that provide workers' compensation insurance coverage and
11-6 the number and percentage of employees covered;
11-7 (10) the number and percentage of participating
11-8 employers that offer health care insurance coverage and the number
11-9 and percentage of employees covered;
11-10 (11) the number and percentage of women employers and
11-11 minority employers receiving grants under the program and the total
11-12 amount of the grants awarded, broken out by group;
11-13 (12) the number and percentage of women, minority
11-14 group members, and disabled individuals participating as trainees
11-15 in training projects, broken out by group; and
11-16 (13) the number and percentage of women private
11-17 providers and private providers who are minority group members
11-18 utilized by employers in training projects, broken out by group.
11-19 (c) In addition to the information required under Subsection
11-20 (b), the commission shall include in the annual report, for each
11-21 region of the state in which a grant is awarded:
11-22 (1) the percentage of the state labor force residing
11-23 in the region; and
11-24 (2) the percentage paid by employers in that region of
11-25 the total number of unemployment insurance contributions paid by
11-26 employers during the preceding calendar year.
11-27 SECTION 2. Section 204.0065, Labor Code, is amended to read
12-1 as follows:
12-2 Sec. 204.0065. TEMPORARY INITIAL CONTRIBUTION RATE.
12-3 Notwithstanding Section 204.006, on and after January 1, 1994, a
12-4 person's contribution rate shall be two and six-tenths percent
12-5 until the date the experience rate computed under Section 204.041
12-6 takes effect for the employer. This section expires December 31,
12-7 2007 [1999].
12-8 SECTION 3. Section 204.0625, Labor Code, is amended to read
12-9 as follows:
12-10 Sec. 204.0625. TEMPORARY ADJUSTMENT TO REPLENISHMENT TAX
12-11 RATE. On and after January 1, 1994, the replenishment tax rate
12-12 computed under Section 204.062 shall be adjusted to a rate computed
12-13 by subtracting 0.1 from the quotient computed under Section
12-14 204.062(a). This section expires December 31, 2007 [1999].
12-15 SECTION 4. Section 204.124, Labor Code, is amended to read
12-16 as follows:
12-17 Sec. 204.124. EXPIRATION. This subchapter expires December
12-18 31, 2007 [1999].
12-19 SECTION 5. Section 302.021(a), Labor Code, is amended to
12-20 read as follows:
12-21 (a) The following job-training, employment, and
12-22 employment-related educational programs and functions are
12-23 consolidated under the authority of the division:
12-24 (1) adult education programs under Subchapter H,
12-25 Chapter 29, Education Code;
12-26 (2) proprietary school programs under Chapter 132,
12-27 Education Code;
13-1 (3) apprenticeship programs under Chapter 133,
13-2 Education Code;
13-3 (4) postsecondary vocational and technical
13-4 job-training programs that are not a part of approved courses or
13-5 programs that lead to licensing, certification, or an associate
13-6 degree under Chapters 61, 130, and 135, Education Code, Subchapter
13-7 E, Chapter 88, Education Code, and Subchapter E, Chapter 96,
13-8 Education Code;
13-9 (5) employment programs under Chapter 31, Human
13-10 Resources Code;
13-11 (6) the senior citizens employment program under
13-12 Chapter 101, Human Resources Code;
13-13 (7) the work and family policies program under Chapter
13-14 81;
13-15 (8) job-training programs funded under the Job
13-16 Training Partnership Act (29 U.S.C. Section 1501 et seq.);
13-17 (9) the smart jobs program under Subchapter E;
13-18 (10) the job counseling program for displaced
13-19 homemakers under Chapter 304;
13-20 (11) [(10)] the Communities in Schools program under
13-21 Chapter 305;
13-22 (12) [(11)] the reintegration of offenders program
13-23 under Chapter 306;
13-24 [(12) the inmate employment counseling program under
13-25 Section 499.051(f), Government Code;]
13-26 (13) the continuity of care program under Section
13-27 501.095, Government Code;
14-1 (14) [a literacy program from funds available to the
14-2 state under Section 481.026, Government Code;]
14-3 [(15)] the employment service;
14-4 (15) [(16)] the community service program under the
14-5 National and Community Service Act of 1990 (42 U.S.C. Section 12501
14-6 et seq.);
14-7 (16) [(17)] the trade adjustment assistance program
14-8 under Part 2, Subchapter II, Trade Act of 1974 (19 U.S.C. Section
14-9 2271 et seq.);
14-10 [(18) the Job Opportunities and Basic Skills program
14-11 under Part F, Subchapter IV, Social Security Act (42 U.S.C. Section
14-12 682);]
14-13 (17) [(19)] the food stamp employment and training
14-14 program authorized under 7 U.S.C. Section 2015(d); and
14-15 (18) [(20)] the functions of the State Occupational
14-16 Information Coordinating Committee.
14-17 SECTION 6. Section 19.011(a), Education Code, is amended to
14-18 read as follows:
14-19 (a) In order to achieve the goals stated in Section 19.003,
14-20 the district with the cooperation of the Health and Human Services
14-21 Commission, the Council on Workforce and Economic Competitiveness,
14-22 the Texas Workforce Commission [Department of Commerce], and the
14-23 department shall provide persons confined or imprisoned in the
14-24 department:
14-25 (1) information from local workforce and development
14-26 boards on job training and employment referral services;
14-27 (2) information on the tax refund voucher program
15-1 under Subchapter D, Chapter 31, Human Resources Code; and
15-2 (3) information on the smart jobs [fund] program.
15-3 SECTION 7. Section 481.028(b), Government Code, is amended
15-4 to read as follows:
15-5 (b) The department shall enter into an agreement as required
15-6 by Subsection (a) with the:
15-7 (1) Department of Agriculture regarding each agency's
15-8 international marketing efforts and business finance programs;
15-9 (2) Texas Workforce Commission regarding the skills
15-10 development fund, and the dissemination of employment-related data,
15-11 statistics, and analyses, and the use of field offices to
15-12 distribute information of interest to businesses and communities in
15-13 the state[, including applications for Smart Jobs grants];
15-14 (3) General Land Office regarding each agency's rural
15-15 economic development efforts;
15-16 (4) Texas Department of Housing and Community Affairs
15-17 regarding each agency's community development programs;
15-18 (5) Texas Department of Transportation and Parks and
15-19 Wildlife Department regarding each agency's efforts to promote
15-20 tourism;
15-21 (6) Texas Natural Resource Conservation Commission
15-22 regarding small business finance and permits, the marketing of
15-23 recyclable products, and business permits;
15-24 (7) office of the comptroller regarding the
15-25 dissemination of economic data, statistics, and analyses and the
15-26 use of field offices to distribute information to businesses and
15-27 local communities in the state;
16-1 (8) Texas Historical Commission regarding community
16-2 preservation, restoration, and revitalization;
16-3 (9) General Services Commission regarding providing
16-4 procurement information, certification, and technical assistance to
16-5 small and historically underutilized businesses;
16-6 (10) Alternative Fuels Council regarding the promotion
16-7 of alternative fuels;
16-8 (11) institutions of higher education regarding work
16-9 force development, literacy, and technology transfer; and
16-10 (12) Texas Agricultural Finance Authority regarding
16-11 the marketing and promotion of the programs administered by the
16-12 authority.
16-13 SECTION 8. Section 2308.308, Government Code, is amended to
16-14 read as follows:
16-15 Sec. 2308.308. PUBLIC COMMUNITY COLLEGE. A public community
16-16 college shall promptly provide workforce training and services that
16-17 are requested:
16-18 (1) by a board if the need for the training and
16-19 services is based on the labor market information system available
16-20 for the area;
16-21 (2) by employers located in the college's taxing
16-22 district when the request is presented directly to the college by
16-23 the employers or through the board; or
16-24 (3) as part of economic development incentives
16-25 designed to attract or retain an employer, including incentives
16-26 offered under the smart jobs fund program under Subchapter E [J],
16-27 Chapter 302, Labor Code [481].
17-1 SECTION 9. Sections 306.007(a) and (b), Labor Code, are
17-2 amended to read as follows:
17-3 (a) To assist in the reintegration into the labor force of
17-4 persons formerly sentenced to the institutional division or the
17-5 state jail division, the commission through Project RIO shall
17-6 provide:
17-7 (1) to those persons:
17-8 (A) information from local workforce development
17-9 boards on job training and employment referral services;
17-10 (B) information from the Texas Commission on
17-11 Alcohol and Drug Abuse on substance abuse treatment services;
17-12 (C) information from the Texas Department of
17-13 Housing and Community Affairs on housing services;
17-14 (D) information from the Texas Veterans
17-15 Commission on services for veterans; and
17-16 (E) information [from the Texas Department of
17-17 Human Services] on tax refund voucher programs under Subchapter H
17-18 [D], Chapter 301 [31, Human Resources Code]; and
17-19 (2) to the employers and potential employers of those
17-20 persons:
17-21 (A) information regarding the smart jobs program
17-22 under Chapter 302;
17-23 (B) information from the Texas Department of
17-24 Economic Development [Commerce] on the enterprise zone program [and
17-25 smart jobs fund program]; and
17-26 (C) [(B)] information from local workforce
17-27 development boards on services listed in Section 2308.304,
18-1 Government Code.
18-2 (b) The commission shall adopt a memorandum of understanding
18-3 with each of the following agencies that establishes the respective
18-4 responsibilities of the commission and the agencies in providing
18-5 information described by Subsection (a) to persons formerly
18-6 sentenced to the institutional division or the state jail division
18-7 of the Texas Department of Criminal Justice, to employers or
18-8 potential employers of those persons, and to local workforce
18-9 development boards:
18-10 (1) the Texas Commission on Alcohol and Drug Abuse;
18-11 (2) the Texas Department of Housing and Community
18-12 Affairs;
18-13 (3) the Texas Veterans Commission;
18-14 (4) the Texas Department of Human Services;
18-15 (5) the Texas Department of Economic Development
18-16 [Commerce]; and
18-17 (6) the Council on Workforce and Economic
18-18 Competitiveness.
18-19 SECTION 10. Subchapter J, Chapter 481, Government Code, is
18-20 repealed.
18-21 SECTION 11. (a) The smart jobs fund program established
18-22 under Subchapter J, Chapter 481, Government Code, is abolished on
18-23 the effective date of this Act. The Texas Department of Economic
18-24 Development may not award a grant under that program on or after
18-25 that date.
18-26 (b) Section 302.085, Labor Code, as added by this Act,
18-27 applies only to a grant awarded by the director of the division of
19-1 workforce development of the Texas Workforce Commission on or
19-2 after January 1, 2000. A grant awarded before that date by the
19-3 Texas Department of Economic Development is governed by the law in
19-4 effect on the date that the grant was awarded by the Texas
19-5 Department of Economic Development, and the former law is continued
19-6 in effect for that purpose.
19-7 SECTION 12. The Texas Workforce Commission shall adopt rules
19-8 to implement Subchapter E, Chapter 302, Labor Code, as added by
19-9 this Act, not later than December 31, 1999.
19-10 SECTION 13. This Act takes effect September 1, 1999.
19-11 SECTION 14. The importance of this legislation and the
19-12 crowded condition of the calendars in both houses create an
19-13 emergency and an imperative public necessity that the
19-14 constitutional rule requiring bills to be read on three several
19-15 days in each house be suspended, and this rule is hereby suspended.