1-1 By: Gallego, et al. (Senate Sponsor - Sibley) H.B. No. 3452
1-2 (In the Senate - Received from the House May 10, 2001;
1-3 May 10, 2001, read first time and referred to Committee on Business
1-4 and Commerce; May 11, 2001, reported adversely, with favorable
1-5 Committee Substitute by the following vote: Yeas 5, Nays 1;
1-6 May 11, 2001, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 3452 By: Sibley
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the abolition and transfer of functions of the Texas
1-11 Department of Economic Development, the operation, funding, and
1-12 administration of the smart jobs fund program, and the creation of
1-13 the Office of Strategic Business Development.
1-14 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-15 ARTICLE 1. ABOLITION AND TRANSFER OF FUNCTIONS OF THE
1-16 TEXAS DEPARTMENT OF ECONOMIC DEVELOPMENT
1-17 SECTION 1.01. (a) The Texas Department of Economic
1-18 Development established under Chapter 481, Government Code, is
1-19 abolished on the effective date of this Act.
1-20 (b) Chapter 481, Government Code, is repealed.
1-21 SECTION 1.02. (a) On the effective date of this Act, all
1-22 powers, duties, obligations, rights, contracts, records, employees,
1-23 property, and unspent and unobligated appropriations and other
1-24 funds of the Texas Department of Economic Development that are used
1-25 by that agency on the effective date of this Act to administer the
1-26 capital fund or office of rural affairs are transferred to the
1-27 Department of Agriculture.
1-28 (b) All rules, policies, procedures, and decisions that
1-29 affect the capital fund or office of rural affairs are continued in
1-30 effect until superseded by a rule or other appropriate action of
1-31 the Department of Agriculture.
1-32 (c) Any action or proceeding before the Texas Department of
1-33 Economic Development relating to the capital fund or office of
1-34 rural affairs is transferred without change in status to the
1-35 Department of Agriculture, and the Department of Agriculture
1-36 assumes, without change in status, the position of the Texas
1-37 Department of Economic Development in any action or proceeding
1-38 relating to the capital fund or office of rural affairs to which
1-39 the Texas Department of Economic Development is a party.
1-40 (d) A reference in law to the Texas Department of Economic
1-41 Development that relates to the capital fund or office of rural
1-42 affairs means the Department of Agriculture.
1-43 SECTION 1.03. (a) On the effective date of this Act, all
1-44 powers, duties, obligations, rights, contracts, records, employees,
1-45 property, and unspent and unobligated appropriations and other
1-46 funds of the Texas Department of Economic Development that are used
1-47 by that agency on the effective date of this Act to administer the
1-48 capital access fund, the industrial revenue bond program, the
1-49 leverage fund, the linked deposit program, the Texas enterprise
1-50 zone program, the defense economic readjustment zone program, the
1-51 Texas small business industrial development corporation, the Texas
1-52 empowerment zone, or the Texas business and commerce economic
1-53 development clearinghouse are transferred to the comptroller.
1-54 (b) All rules, policies, procedures, and decisions that
1-55 affect the capital access fund, the industrial revenue bond
1-56 program, the leverage fund, the linked deposit program, the Texas
1-57 enterprise zone program, the defense economic readjustment zone
1-58 program, the Texas small business industrial development
1-59 corporation, the Texas empowerment zone, or the Texas business and
1-60 commerce economic development clearinghouse are continued in effect
1-61 until superseded by a rule or other appropriate action of the
1-62 comptroller.
1-63 (c) Any action or proceeding before the Texas Department of
1-64 Economic Development relating to the capital access fund, the
2-1 industrial revenue bond program, the leverage fund, the linked
2-2 deposit program, the Texas enterprise zone program, the defense
2-3 economic readjustment zone program, the Texas small business
2-4 industrial development corporation, the Texas empowerment zone, or
2-5 the Texas business and commerce economic development clearinghouse
2-6 is transferred without change in status to the comptroller, and the
2-7 comptroller assumes, without change in status, the position of the
2-8 Texas Department of Economic Development in any action or
2-9 proceeding relating to the capital access fund, the industrial
2-10 revenue bond program, the leverage fund, the linked deposit
2-11 program, the Texas enterprise zone program, the defense economic
2-12 readjustment zone program, the Texas small business industrial
2-13 development corporation, the Texas empowerment zone, or the Texas
2-14 business and commerce economic development clearinghouse to which
2-15 the Texas Department of Economic Development is a party.
2-16 (d) A reference in law to the Texas Department of Economic
2-17 Development that relates to the capital access fund, the industrial
2-18 revenue bond program, the leverage fund, the linked deposit
2-19 program, the Texas enterprise zone program, the defense economic
2-20 readjustment zone program, the Texas small business industrial
2-21 development corporation, the Texas empowerment zone, or the Texas
2-22 business and commerce economic development clearinghouse means the
2-23 comptroller.
2-24 SECTION 1.04. (a) On the effective date of this Act, all
2-25 powers, duties, obligations, rights, contracts, records, employees,
2-26 property, and unspent and unobligated appropriations and other
2-27 funds of the Texas Department of Economic Development that are used
2-28 by that agency on the effective date of this Act to administer
2-29 international trade functions or foreign offices are transferred to
2-30 the secretary of state.
2-31 (b) All rules, policies, procedures, and decisions that
2-32 affect international trade functions or foreign offices are
2-33 continued in effect until superseded by a rule or other appropriate
2-34 action of the secretary of state.
2-35 (c) Any action or proceeding before the Texas Department of
2-36 Economic Development relating to international trade functions or
2-37 foreign offices is transferred without change in status to the
2-38 secretary of state, and the secretary of state assumes, without
2-39 change in status, the position of the Texas Department of Economic
2-40 Development in any action or proceeding relating to international
2-41 trade functions or foreign offices to which the Texas Department of
2-42 Economic Development is a party.
2-43 (d) A reference in law to the Texas Department of Economic
2-44 Development that relates to international trade functions or
2-45 foreign offices means the secretary of state.
2-46 SECTION 1.05. (a) On the effective date of this Act, all
2-47 powers, duties, obligations, rights, contracts, records, employees,
2-48 property, and unspent and unobligated appropriations and other
2-49 funds of the Texas Department of Economic Development that are used
2-50 by that agency on the effective date of this Act to administer
2-51 tourism functions are transferred to the Texas Department of
2-52 Transportation.
2-53 (b) All rules, policies, procedures, and decisions that
2-54 affect tourism functions are continued in effect until superseded
2-55 by a rule or other appropriate action of the Texas Department of
2-56 Transportation.
2-57 (c) Any action or proceeding before the Texas Department of
2-58 Economic Development relating to tourism functions is transferred
2-59 without change in status to the Texas Department of Transportation,
2-60 and the Texas Department of Transportation assumes, without change
2-61 in status, the position of the Texas Department of Economic
2-62 Development in any action or proceeding relating to tourism
2-63 functions to which the Texas Department of Economic Development is
2-64 a party.
2-65 (d) A reference in law to the Texas Department of Economic
2-66 Development that relates to tourism functions means the Texas
2-67 Department of Transportation.
2-68 SECTION 1.06. (a) On the effective date of this Act, all
2-69 powers, duties, obligations, rights, contracts, records, employees,
3-1 property, and unspent and unobligated appropriations and other
3-2 funds of the Texas Department of Economic Development that are used
3-3 by that agency on the effective date of this Act to administer
3-4 business marketing functions, corporate expansion and recruitment
3-5 functions, the office of small business assistance, or the office
3-6 of defense affairs are transferred to the Office of Strategic
3-7 Business Development.
3-8 (b) All rules, policies, procedures, and decisions that
3-9 affect business marketing functions, corporate expansion and
3-10 recruitment functions, the office of small business assistance, or
3-11 the office of defense affairs are continued in effect until
3-12 superseded by a rule or other appropriate action of the Office of
3-13 Strategic Business Development.
3-14 (c) Any action or proceeding before the Texas Department of
3-15 Economic Development relating to business marketing functions,
3-16 corporate expansion and recruitment functions, the office of small
3-17 business assistance, or the office of defense affairs is
3-18 transferred without change in status to the Office of Strategic
3-19 Business Development, and the Office of Strategic Business
3-20 Development assumes, without change in status, the position of the
3-21 Texas Department of Economic Development in any action or
3-22 proceeding relating to business marketing functions, corporate
3-23 expansion and recruitment functions, the office of small business
3-24 assistance, or the office of defense affairs to which the Texas
3-25 Department of Economic Development is a party.
3-26 (d) A reference in law to the Texas Department of Economic
3-27 Development that relates to business marketing functions, corporate
3-28 expansion and recruitment functions, the office of small business
3-29 assistance, or the office of defense affairs means the Office of
3-30 Strategic Business Development.
3-31 ARTICLE 2. FUNDING AND ADMINISTRATION OF SMART JOBS
3-32 FUND PROGRAM
3-33 SECTION 2.01. Chapter 2308, Government Code, is amended by
3-34 adding Subchapter I to read as follows:
3-35 SUBCHAPTER I. SMART JOBS FUND PROGRAM
3-36 Sec. 2308.501. DEFINITIONS. In this chapter:
3-37 (1) "Council" means the Council on Workforce and
3-38 Economic Competitiveness.
3-39 (2) "County average weekly wage" means the average
3-40 weekly wage paid by all employers in a county that are covered by
3-41 unemployment compensation insurance, as determined by the
3-42 commission for the most recent period for which data is available.
3-43 (3) "Employee" means an individual who performs
3-44 services for another under a contract of hire, whether express or
3-45 implied, or oral or written.
3-46 (4) "Employer" means a person that employs one or more
3-47 employees.
3-48 (5) "Executive director" means the executive director
3-49 of the commission.
3-50 (6) "Existing employer" means an employer that:
3-51 (A) has been liable to pay contributions under
3-52 Subtitle A for more than one year;
3-53 (B) has employees; and
3-54 (C) is in compliance with the reporting and
3-55 payment requirements of Subtitle A, as determined by the
3-56 commission.
3-57 (7) "Group health benefit plan" means:
3-58 (A) a health plan provided by a health
3-59 maintenance organization established under the Texas Health
3-60 Maintenance Organization Act (Chapter 20A, Vernon's Texas Insurance
3-61 Code);
3-62 (B) a health benefit plan approved by the
3-63 commissioner of insurance; or
3-64 (C) a self-funded or self-insured employee
3-65 welfare benefit plan that provides health benefits and is
3-66 established in accordance with the Employee Retirement Income
3-67 Security Act of 1974 (29 U.S.C. Section 1001 et seq.), as amended.
3-68 (8) "In-kind contribution" means a noncash
3-69 contribution of goods and services provided by an employer as all
4-1 or part of the employer's matching share of a grant or project.
4-2 (9) "Job" means employment on a basis customarily
4-3 considered full-time for the applicable occupation and industry.
4-4 (10) "Large business" means a business entity that
4-5 employs at least 500 employees.
4-6 (11) "Medium business" means a business entity that
4-7 employs more than 99 but fewer than 500 employees.
4-8 (12) "Micro-business" means a business entity that
4-9 employs not more than 20 employees.
4-10 (13) "Minority employer" means a business entity at
4-11 least 51 percent of which is owned by minority group members or, in
4-12 the case of a corporation, at least 51 percent of the shares of
4-13 which are owned by minority group members and that:
4-14 (A) is managed and, in daily operations, is
4-15 controlled by minority group members; and
4-16 (B) is a domestic business entity with a home or
4-17 branch office located in this state and is not a branch or
4-18 subsidiary of a foreign corporation or other foreign business
4-19 entity.
4-20 (14) "Minority group members" include:
4-21 (A) African Americans;
4-22 (B) American Indians;
4-23 (C) Asian Americans;
4-24 (D) Mexican Americans and other Americans of
4-25 Hispanic origin; and
4-26 (E) women.
4-27 (15) "Program" means the smart jobs fund program
4-28 created under this chapter.
4-29 (16) "Project" means a specific employment training
4-30 project developed and implemented under this chapter.
4-31 (17) "Provider" means a person that provides
4-32 employment-related training. The term includes employers, employer
4-33 associations, labor organizations, community-based organizations,
4-34 training consultants, public and private schools, technical
4-35 institutes, junior or community colleges, senior colleges,
4-36 universities, and proprietary schools, as defined by Section
4-37 132.001, Education Code.
4-38 (18) "Qualified job" means a job for which an
4-39 application has been submitted and that:
4-40 (A) pays at least 100 percent of the county
4-41 average weekly wage; and
4-42 (B) is covered by a group health benefit plan
4-43 for which the business offers to pay at least 50 percent of the
4-44 premiums or other charges assessed for employee-only coverage under
4-45 the plan, regardless of whether an employee may voluntarily waive
4-46 the coverage.
4-47 (19) "Small business" means a business entity that
4-48 employs more than 20 but fewer than 100 employees.
4-49 (20) "Trainee" means a participant in a project funded
4-50 under this chapter.
4-51 (21) "Wages" means all forms of compensation or
4-52 remuneration, excluding benefits, payable for a specific period to
4-53 an employee for personal services rendered by that employee.
4-54 Sec. 2308.502. SMART JOBS FUND PROGRAM; PURPOSE;
4-55 ADMINISTRATION. (a) The smart jobs fund program is created in the
4-56 council as a workforce development incentive program to enhance
4-57 employment opportunities for residents of this state and to
4-58 increase the job skills of the existing workforce by providing job
4-59 training assistance to businesses operating in, or relocating to,
4-60 this state.
4-61 (b) The program shall award grants for the creation and
4-62 retention of qualified jobs. At least 60 percent of the money
4-63 spent under the program shall be used for projects that assist
4-64 existing employers. At least 20 percent shall be used for
4-65 employers that relocate operations to this state.
4-66 (c) The council by rule shall develop and adopt a scoring
4-67 system that evaluates the economic impact of grant applications and
4-68 reflects the criteria set forth in this chapter. The council shall
4-69 use the scoring system and a competitive process to award grants.
5-1 It is the intent of the legislature that, to the greatest extent
5-2 practicable:
5-3 (1) money from the smart jobs fund be spent:
5-4 (A) in all areas of this state; and
5-5 (B) in approximate proportion to each region's
5-6 share of the state's population, civilian labor force, unemployed,
5-7 and submission of grant applications for qualified jobs; and
5-8 (2) grants shall be awarded to micro-businesses, small
5-9 businesses, medium businesses, large businesses, and minority
5-10 employers in a manner proportionate to the number of persons
5-11 employed by those categories of businesses.
5-12 (d) The council shall determine appropriate means to
5-13 accomplish the goals of the program. As necessary to implement
5-14 those goals, the council may work in conjunction with the
5-15 comptroller.
5-16 (e) The council shall administer the program.
5-17 (f) The council may employ personnel as necessary to
5-18 administer the program.
5-19 (g) In implementing provisions under this chapter regarding
5-20 the classification of this state into regions, the council shall
5-21 use the uniform service regions established by the comptroller
5-22 under Section 120, Article V, Chapter 19, Acts of the 72nd
5-23 Legislature, 1st Called Session, 1991 (the General Appropriations
5-24 Act).
5-25 Sec. 2308.503. RULES. The council shall adopt rules as
5-26 necessary to implement the program.
5-27 Sec. 2308.504. FUNDING; RAINY DAY FUND. (a) The smart jobs
5-28 fund is established as a special trust fund in the custody of the
5-29 comptroller separate and apart from all public money or funds of
5-30 this state. The fund is composed of:
5-31 (1) money transferred into the fund under Section
5-32 204.123, Labor Code;
5-33 (2) gifts, grants, and other donations received by the
5-34 council for the fund; and
5-35 (3) any amounts appropriated by the legislature for
5-36 the program from the general revenue fund.
5-37 (b) The program is funded through the smart jobs fund.
5-38 (c) Money in the smart jobs fund may be used for program
5-39 administration, marketing expenses, and evaluation of the program.
5-40 These costs of the council in any fiscal year may not exceed the
5-41 lesser of:
5-42 (1) five percent of the total amount appropriated for
5-43 the program for that fiscal year; or
5-44 (2) $1.5 million.
5-45 (d) The smart jobs rainy day fund is established as a
5-46 special trust fund in the custody of the comptroller separate and
5-47 apart from all public money or funds of this state. The smart jobs
5-48 rainy day fund is composed of:
5-49 (1) money transferred to that fund as provided by
5-50 Section 204.123, Labor Code;
5-51 (2) money returned by employers or recouped by the
5-52 program under Section 2308.510(d); and
5-53 (3) any other money received by the council for
5-54 deposit in that fund.
5-55 (e) The council may use money in the smart jobs rainy day
5-56 fund if:
5-57 (1) the council determines, after consulting with the
5-58 comptroller, that the smart jobs fund contains insufficient money
5-59 to cover the amounts appropriated by the legislature to operate the
5-60 program; and
5-61 (2) the council has determined that:
5-62 (A) the unemployment rate in this state is 125
5-63 percent of the average unemployment rate in this state during the
5-64 preceding three years; or
5-65 (B) a severe economic dislocation is occurring
5-66 in a specific region of this state.
5-67 (f) The council by rule shall define "severe economic
5-68 dislocation" for purposes of Subsection (e). In adopting a
5-69 definition, the council shall consider employment-related factors,
6-1 including:
6-2 (1) massive layoffs in a region of this state caused
6-3 by:
6-4 (A) the closure of military bases;
6-5 (B) the effect of the implementation of the
6-6 North American Free Trade Agreement;
6-7 (C) employer relocations; or
6-8 (D) other analogous situations; and
6-9 (2) the number of jobs lost in a region compared to
6-10 the region's usual rates of employment.
6-11 (g) If the council approves the use of money from the smart
6-12 jobs rainy day fund because of a severe economic dislocation
6-13 occurring in a specific region of the state, the council may use
6-14 the money allocated from the smart jobs rainy day fund solely for
6-15 projects located in the affected region.
6-16 (h) Notwithstanding any other provision of this section, the
6-17 total combined amount spent in any fiscal year from the smart jobs
6-18 fund and the smart jobs rainy day fund may not exceed the amount
6-19 appropriated by the legislature for that fiscal year for the
6-20 operation of the program.
6-21 (i) If, during any three consecutive months, the balance in
6-22 the smart jobs fund or the smart jobs rainy day fund exceeds 0.15
6-23 percent of the total taxable wages for the four calendar quarters
6-24 ending the preceding June 30, as computed under Section 204.062(c),
6-25 Labor Code, the council shall immediately transfer the excess from
6-26 the applicable fund to the unemployment compensation fund created
6-27 under Section 203.021, Labor Code.
6-28 Sec. 2308.505. GRANTS. (a) The council may award grants for
6-29 projects that meet the requirements of this chapter.
6-30 (b) A grant may not be awarded unless each employer
6-31 participating in the project certifies that:
6-32 (1) a job or job opening exists or will exist at the
6-33 end of the project for which the grant is sought; and
6-34 (2) the job or job opening will be filled by a
6-35 participant in the project.
6-36 (c) Except as otherwise provided by this subsection, a grant
6-37 may not be awarded unless each employer participating in the
6-38 project certifies that each job under the project is covered by a
6-39 group health benefit plan for which the business pays at least 50
6-40 percent of the premiums or other charges assessed for employee-only
6-41 coverage under the plan. The council may waive the coverage
6-42 requirement for a particular job if the affected employee
6-43 voluntarily waives the coverage in the manner prescribed by rules
6-44 adopted by the council.
6-45 (d) A grant may not be awarded for a project under this
6-46 section unless each employer participating in the project certifies
6-47 that the starting wage for a new job created through the project
6-48 will be equal to or greater than the county average weekly wage for
6-49 the county in which the job or project is located and that the wage
6-50 for a job existing on the date that the project is scheduled to
6-51 begin will be increased to the greater of:
6-52 (1) three percent for a micro-business or small
6-53 business or five percent for a business that is not a
6-54 micro-business or small business over the wage in effect on the day
6-55 before the date on which the project is scheduled to begin for that
6-56 job; or
6-57 (2) 100 percent of the county average weekly wage for
6-58 the county in which the job or project is located.
6-59 (e) An employer may apply for a grant under this chapter.
6-60 An employer may request a modification of the requirements provided
6-61 by Subsection (d) and Section 2308.508, if reasonable factors exist
6-62 for the modification, as determined by the council.
6-63 (f) Grants awarded under this section for which the council
6-64 has modified the requirements of Subsection (d) may not, in any
6-65 fiscal year, exceed 10 percent of the total dollar amount of grants
6-66 awarded under the program in that year.
6-67 (g) Unless modified by the council under rules adopted by
6-68 the council, a grant may not be awarded for a project unless each
6-69 employer participating in the project certifies that it will
7-1 continue to spend on nonmanagerial training an amount from private
7-2 sources equal to the average amount spent by that employer on such
7-3 training for the most recent two-year period.
7-4 (h) A grant may not be awarded for a project if the project
7-5 will impair existing contracts for services or collective
7-6 bargaining agreements, except that a project inconsistent with the
7-7 terms of a collective bargaining agreement may be undertaken with
7-8 the written concurrence of the collective bargaining unit and the
7-9 employer or employers who are parties to the agreement.
7-10 Sec. 2308.506. GRANT APPLICATION; AWARDING OF GRANTS. (a)
7-11 The following may apply for a grant under this chapter:
7-12 (1) one or more employers to secure training;
7-13 (2) one or more employers acting in partnership with
7-14 an employer organization, labor organization, or community-based
7-15 organization to secure training; or
7-16 (3) one or more employers acting in partnership with a
7-17 consortium composed of more than one provider to secure training.
7-18 (b) A grant application must be filed with the council in a
7-19 form approved by the council and, except as provided by Subsection
7-20 (c), must include a complete business and training plan, including:
7-21 (1) the number and kind of jobs available;
7-22 (2) the skills and competencies required for the
7-23 identified jobs;
7-24 (3) the wages to be paid to trainees on successful
7-25 completion of the project;
7-26 (4) the goals, objectives, and outcome measures for
7-27 the project;
7-28 (5) the proposed curriculum for the project; and
7-29 (6) the projected cost per person enrolled, trained,
7-30 hired, and retained in employment.
7-31 (c) The council by rule may exempt a micro-business from the
7-32 requirement to submit a business and training plan that complies
7-33 with Subsection (b). The council by rule shall establish a
7-34 simplified application process for grant applications from
7-35 micro-businesses.
7-36 (d) The council may provide assistance with the application
7-37 process to all applicants and shall give priority to assisting
7-38 applicants who are small businesses or micro-businesses.
7-39 (e) The council shall minimize the length of the application
7-40 form and shall simplify as much as possible the review process for
7-41 grant applications.
7-42 (f) The council shall notify each applicant as to whether
7-43 the application is complete not later than the fifth business day
7-44 after the date on which the application is received by the council.
7-45 Sec. 2308.507. PARTICIPATION IN ADDITIONAL PROGRAMS;
7-46 APPLICATION REQUIREMENTS. (a) A business may not apply both for a
7-47 grant under this chapter and to a public community or technical
7-48 college for customized training and assessment from the college
7-49 through a grant issued to the college under the skills development
7-50 fund program established under Chapter 303, Labor Code, unless the
7-51 business and the college file an application for concurrent
7-52 participation in both programs.
7-53 (b) The council by rule shall establish the requirements for
7-54 an application subject to this section.
7-55 Sec. 2308.508. MATCHING REQUIREMENTS; EXEMPTIONS. (a) Money
7-56 provided under a grant for a project must be matched by private
7-57 funds provided by the employer benefiting from the project in an
7-58 amount at least equal to the amount provided by the grant.
7-59 (b) The council may adopt rules modifying the requirements
7-60 of Subsection (a) for employers that are small businesses or
7-61 micro-businesses and may also adopt rules modifying the
7-62 requirements of Subsection (a) for projects that provide
7-63 significant economic benefits to an entire region of the state.
7-64 (c) Employer matches may include documented in-kind
7-65 contributions as well as wages paid to trainees during the training
7-66 period.
7-67 Sec. 2308.509. TRAINEES. The program shall give priority to
7-68 residents of this state, including residents formerly sentenced to
7-69 the institutional division or the state jail division of the Texas
8-1 Department of Criminal Justice.
8-2 Sec. 2308.510. CONTRACTS. (a) The council may approve any
8-3 project that meets the requirements of this chapter. If a project
8-4 is approved and funds are available, the council shall enter into a
8-5 contract with the grant applicant and with each employer
8-6 participating in the project. The contract must specify those
8-7 skills and competencies to be gained as a result of the project.
8-8 (b) Reimbursable costs in the contract may include only
8-9 those expenses related to direct training in job-related basic
8-10 skills, including literacy skills, job-related vocational skills,
8-11 and administrative costs. Total administrative costs for any
8-12 particular project may not exceed 10 percent of the project's
8-13 expenditures.
8-14 (c) Each contract must provide a schedule for payment of
8-15 smart jobs fund money. Twenty-five percent of allowable
8-16 expenditures shall be withheld by the council for 90 days after the
8-17 date of completion of the contract. If at least 85 percent of the
8-18 trainees in the project have been retained in employment for that
8-19 90-day period, other than trainees who leave the employment
8-20 voluntarily for better-paying jobs, and have successfully achieved
8-21 the skills and competencies, wage requirements, and other
8-22 contractual obligations, the amount of allowable expenditures
8-23 withheld shall be remitted to the employer. The council by rule
8-24 shall establish procedures as necessary to verify that a trainee
8-25 has left the employment for a better-paying job. If there is a
8-26 negative balance, the employer is liable for the amount of the
8-27 negative balance and shall remit that amount to the council not
8-28 later than the 30th day after the date on which the employer is
8-29 notified of the negative balance by the council.
8-30 (d) Each contract must state the term of the grant award. A
8-31 grant recipient who does not use all money awarded under the grant
8-32 for the prescribed purpose within the allotted term shall reimburse
8-33 the program by submitting the appropriate amount to the council not
8-34 later than the 30th day after the expiration date of the term of
8-35 the grant award. The council shall remit money received under this
8-36 subsection to the comptroller for deposit in the smart jobs rainy
8-37 day fund.
8-38 Sec. 2308.511. SMART JOBS PROGRAM CONTRACT PROVISIONS. The
8-39 council shall by rule require each smart jobs contract to have:
8-40 (1) clearly defined goals, outputs, and measurable
8-41 outcomes that directly relate to program objectives;
8-42 (2) clearly defined sanctions for noncompliance with
8-43 contract terms; and
8-44 (3) clearly specified accounting, reporting, and
8-45 auditing requirements for funds received under program contracts.
8-46 Sec. 2308.512. SMART JOBS PROGRAM MONITORING PRACTICES. The
8-47 council by rule shall adopt program monitoring practices that
8-48 include:
8-49 (1) risk-assessment to determine which contracts have
8-50 the highest risk for fraud and abuse; and
8-51 (2) a method to obtain and evaluate program cost
8-52 information to ensure all costs, including administrative costs,
8-53 are reasonable and necessary to achieve program objectives.
8-54 Sec. 2308.513. ANNUAL REPORT. (a) The council shall report
8-55 to the governor and the legislature at the end of each fiscal year
8-56 on the status of the program.
8-57 (b) The annual report must include for that fiscal year:
8-58 (1) the total number of applications submitted, the
8-59 total number of applications approved, and the total number of
8-60 applications rejected, reported by region of the state and by size
8-61 of business;
8-62 (2) the number of employers receiving grants under the
8-63 program reported by region of the state and the percentage that
8-64 number represents of the total number of employers receiving grants
8-65 under the program on a statewide basis;
8-66 (3) the total amount of money awarded in each region
8-67 of the state and the percentage that amount represents of the total
8-68 amount of money awarded on a statewide basis;
8-69 (4) a comparison of the percentage of total dollars
9-1 awarded to each region versus each region's percentage of:
9-2 (A) the state's population;
9-3 (B) the civilian labor force;
9-4 (C) the number of unemployed persons; and
9-5 (D) the number of eligible grant applications
9-6 for qualified jobs submitted to the council;
9-7 (5) the value, expressed in dollars and as a
9-8 percentage of total training expenditures, of matching
9-9 contributions made by employers;
9-10 (6) the number of businesses, classified by
9-11 micro-businesses, small businesses, medium businesses, and large
9-12 businesses, that receive grants under the program reported by
9-13 region of the state and business size and the percentage that
9-14 number represents of the total number of each of those categories
9-15 of businesses receiving grants under the program on a statewide
9-16 basis;
9-17 (7) the total amount of money awarded to
9-18 micro-businesses, small businesses, medium businesses, and large
9-19 businesses, reported by region of the state and business size, and
9-20 the percentage that amount represents of the total amount of money
9-21 awarded to those businesses on a statewide basis;
9-22 (8) the number of businesses located in enterprise
9-23 zones, as that term is defined by Chapter 2303, that receive grants
9-24 under the program and the total amount of the grants awarded to
9-25 those businesses;
9-26 (9) the total number of jobs created, enhanced, or
9-27 retained under the program:
9-28 (A) by region of the state;
9-29 (B) by occupation, classified by the applicable
9-30 two-digit standard industrial classification;
9-31 (C) by wage level; and
9-32 (D) whether attributable to:
9-33 (i) relocation of businesses to this
9-34 state, including the percentage the number attributable to the
9-35 relocation of businesses represents of the total number of jobs
9-36 created, enhanced, or retained under the program on a statewide
9-37 basis; or
9-38 (ii) training or retraining of employees
9-39 of existing employers, including the percentage that the number
9-40 attributable to the training or retraining of employees of existing
9-41 employers represents of the total number of jobs created, enhanced,
9-42 or retained under the program on a statewide basis;
9-43 (10) the average and median weekly wage levels of
9-44 trainees entering or returning to the workforce, broken down by
9-45 current employees undergoing retraining and new hires, at three
9-46 months and one year after the conclusion of their training;
9-47 (11) the number and percentage of participating
9-48 employers that provide workers' compensation insurance coverage and
9-49 the number and percentage of employees covered;
9-50 (12) the number and percentage of employees covered by
9-51 the group health benefit plan offered by the employer;
9-52 (13) the number and percentage of women, disabled
9-53 persons, and minority group members receiving grants under the
9-54 program as employers, participating as trainees in training
9-55 projects, or participating in the program as providers, broken out
9-56 by group;
9-57 (14) a list of modifications granted under Section
9-58 2308.505(e), the name of the project for which the modification was
9-59 granted, and the reason the council granted the modification; and
9-60 (15) the number of trainees who have left employment
9-61 with a grant recipient because the trainee has obtained a
9-62 better-paying job, as verified under Section 2308.510(c).
9-63 (c) In addition to the information required under Subsection
9-64 (b), the council shall include in the annual report, for each
9-65 region of the state in which a grant is awarded, the percentage
9-66 paid by employers in that region of the total amount of
9-67 unemployment insurance contributions paid by employers during the
9-68 preceding calendar year.
9-69 SECTION 2.02. Section 19.011(a), Education Code, is amended
10-1 to read as follows:
10-2 (a) In order to achieve the goals stated in Section 19.003,
10-3 the district with the cooperation of the Health and Human Services
10-4 Commission, the Council on Workforce and Economic Competitiveness,
10-5 [the Texas Department of Commerce,] and the department shall
10-6 provide persons confined or imprisoned in the department:
10-7 (1) information from local workforce and development
10-8 boards on job training and employment referral services;
10-9 (2) information on the tax refund voucher program
10-10 under Subchapter H [D], Chapter 301 [31], Labor [Human Resources]
10-11 Code; and
10-12 (3) information on the smart jobs fund program under
10-13 Subchapter I, Chapter 2308, Government Code.
10-14 SECTION 2.03. Section 403.351(a), Government Code, is amended
10-15 to read as follows:
10-16 (a) The comptroller shall perform a biennial performance
10-17 evaluation of:
10-18 (1) the smart jobs fund program established under
10-19 Subchapter I, [Subchapter J,] Chapter 2308 [481]; and
10-20 (2) the skills development fund program established
10-21 under Chapter 303, Labor Code.
10-22 SECTION 2.04. Section 2308.308, Government Code, is amended
10-23 to read as follows:
10-24 Sec. 2308.308. PUBLIC COMMUNITY COLLEGE. A public community
10-25 college shall promptly provide workforce training and services that
10-26 are requested:
10-27 (1) by a board if the need for the training and
10-28 services is based on the labor market information system available
10-29 for the area;
10-30 (2) by employers located in the college's taxing
10-31 district when the request is presented directly to the college by
10-32 the employers or through the board; or
10-33 (3) as part of economic development incentives
10-34 designed to attract or retain an employer, including incentives
10-35 offered under the smart jobs fund program under Subchapter I [J,
10-36 Chapter 481].
10-37 SECTION 2.05. Section 204.123(a), Labor Code, is amended to
10-38 read as follows:
10-39 (a) If, on September 1 of a year, the commission determines
10-40 that the amount in the compensation fund will exceed 100 percent of
10-41 its floor as computed under Section 204.061 on the next October 1
10-42 computation date, the commission shall transfer from the holding
10-43 fund created under Section 204.122:
10-44 (1) 50 percent of the amount in the holding fund to
10-45 the smart jobs fund created under Section 2308.504(a) [481.154(a)],
10-46 Government Code;
10-47 (2) 30 percent of the amount in the holding fund to
10-48 the skills development fund created under Section 303.003; and
10-49 (3) 20 percent of the amount in the holding fund to
10-50 the smart jobs rainy day fund created under Section 2308.504(d)
10-51 [481.154(d)], Government Code.
10-52 SECTION 2.06. Section 302.021(a), Labor Code, is amended to
10-53 read as follows:
10-54 (a) The following job-training, employment, and
10-55 employment-related educational programs and functions are
10-56 consolidated under the authority of the division:
10-57 (1) adult education programs under Subchapter H,
10-58 Chapter 29, Education Code;
10-59 (2) proprietary school programs under Chapter 132,
10-60 Education Code;
10-61 (3) apprenticeship programs under Chapter 133,
10-62 Education Code;
10-63 (4) postsecondary vocational and technical
10-64 job-training programs that are not a part of approved courses or
10-65 programs that lead to licensing, certification, or an associate
10-66 degree under Chapters 61, 130, and 135, Education Code, Subchapter
10-67 E, Chapter 88, Education Code, and Subchapter E, Chapter 96,
10-68 Education Code;
10-69 (5) employment programs under Chapter 31, Human
11-1 Resources Code;
11-2 (6) the senior citizens employment program under
11-3 Chapter 101, Human Resources Code;
11-4 (7) the work and family policies program under Chapter
11-5 81;
11-6 (8) job-training programs funded under the Job
11-7 Training Partnership Act (29 U.S.C. Section 1501 et seq.) and under
11-8 the Workforce Investment Act of 1998 (29 U.S.C. Section 2801 et
11-9 seq.);
11-10 (9) the job counseling program for displaced
11-11 homemakers under Chapter 304;
11-12 (10) the reintegration of offenders program under
11-13 Chapter 306;
11-14 (11) the smart jobs fund program under Subchapter I,
11-15 Chapter 2308 [the inmate employment counseling program under
11-16 Section 499.051(f)], Government Code;
11-17 (12) the continuity of care program under Section
11-18 501.095, Government Code;
11-19 (13) a literacy program from state, local, federal,
11-20 and private funds available to the state for that purpose;
11-21 (14) the employment service;
11-22 (15) the community service program under the National
11-23 and Community Service Act of 1990 (42 U.S.C. Section 12501 et
11-24 seq.);
11-25 (16) the trade adjustment assistance program under
11-26 Part 2, Subchapter II, Trade Act of 1974 (19 U.S.C. Section 2271 et
11-27 seq.);
11-28 (17) education, employment, employment support,
11-29 training services, activities and programs funded under Temporary
11-30 Assistance for Needy Families (42 U.S.C. Section 601 et seq.);
11-31 (18) the food stamp employment and training program
11-32 authorized under 7 U.S.C. Section 2015(d); and
11-33 (19) the functions of the State Occupational
11-34 Information Coordinating Committee.
11-35 SECTION 2.07. Section 303.005, Labor Code, is amended to read
11-36 as follows:
11-37 Sec. 303.005. PARTICIPATION IN ADDITIONAL PROGRAMS;
11-38 APPLICATION REQUIREMENTS. An employer may not apply both to a
11-39 public community or technical college for customized training and
11-40 assessment from the college through a grant issued to the college
11-41 under the skills development fund program established under this
11-42 chapter and for a grant under the smart jobs fund program
11-43 established under Subchapter I [J], Chapter 2308 [481], Government
11-44 Code, unless the employer and the college file an application for
11-45 concurrent participation in both programs that complies with
11-46 Section 2308.507 [481.1565], Government Code.
11-47 SECTION 2.08. Section 306.007(a), Labor Code, is amended to
11-48 read as follows:
11-49 (a) To assist in the reintegration into the labor force of
11-50 persons formerly sentenced to the institutional division or the
11-51 state jail division, the commission through Project RIO shall
11-52 provide:
11-53 (1) to those persons:
11-54 (A) information from local workforce development
11-55 boards on job training and employment referral services;
11-56 (B) information from the Texas Commission on
11-57 Alcohol and Drug Abuse on substance abuse treatment services;
11-58 (C) information from the Texas Department of
11-59 Housing and Community Affairs on housing services;
11-60 (D) information from the Texas Veterans
11-61 Commission on services for veterans; and
11-62 (E) information from the Texas Department of
11-63 Human Services on tax refund voucher programs under Subchapter D,
11-64 Chapter 31, Human Resources Code; and
11-65 (2) to the employers and potential employers of those
11-66 persons:
11-67 (A) information from the Texas Department of
11-68 Economic Development [Commerce] on the enterprise zone program;
11-69 (B) information from the Council on Workforce
12-1 and Economic Competitiveness on the [and] smart jobs fund program;
12-2 and
12-3 (C) [(B)] information from local workforce
12-4 development boards on services listed in Section 2308.304,
12-5 Government Code.
12-6 SECTION 2.09. Subchapter J, Chapter 481, Government Code, is
12-7 repealed.
12-8 SECTION 2.10. (a) On the effective date of this Act, all
12-9 powers, duties, obligations, rights, contracts, records, employees,
12-10 property, and unspent and unobligated appropriations and other
12-11 funds of the Texas Department of Economic Development that are used
12-12 by that agency on the effective date of this Act to administer the
12-13 smart jobs fund program are transferred to the Council on Workforce
12-14 and Economic Competitiveness.
12-15 (b) All rules, policies, procedures, and decisions that
12-16 affect the smart jobs fund program are continued in effect until
12-17 superseded by a rule or other appropriate action of the Council on
12-18 Workforce and Economic Competitiveness.
12-19 (c) Any action or proceeding before the Texas Department of
12-20 Economic Development relating to the smart jobs fund program is
12-21 transferred without change in status to the Council on Workforce
12-22 and Economic Competitiveness, and the Council on Workforce and
12-23 Economic Competitiveness assumes, without change in status, the
12-24 position of the Texas Department of Economic Development in any
12-25 action or proceeding relating to the smart jobs fund program to
12-26 which the Texas Department of Economic Development is a party.
12-27 (d) The smart jobs fund program established under Subchapter
12-28 J, Chapter 481, Government Code, is abolished on the effective date
12-29 of this Act. The Texas Department of Economic Development may not
12-30 award a grant under that program on or after that date. All
12-31 unobligated and unexpended balances in the smart jobs fund created
12-32 under Section 481.154, Government Code, as that section existed
12-33 before repeal by this Act, are transferred on the effective date of
12-34 this Act to the smart jobs fund created under Section 2308.504,
12-35 Government Code, as added by this Act.
12-36 (e) The Council on Workforce and Economic Competitiveness
12-37 shall adopt rules to implement Chapter 2308, Government Code, as
12-38 added by this Act, not later than December 31, 2001.
12-39 ARTICLE 3. CREATION OF THE OFFICE OF
12-40 STRATEGIC BUSINESS DEVELOPMENT
12-41 SECTION 3.01. Subtitle F, Title 4, Government Code, is
12-42 amended by adding Chapter 468 to read as follows:
12-43 CHAPTER 468. OFFICE OF STRATEGIC BUSINESS DEVELOPMENT
12-44 Sec. 468.001. DEFINITIONS. In this chapter:
12-45 (1) "Office" means the Office of Strategic Business
12-46 Development.
12-47 (2) "Executive director" means the executive director
12-48 of the Office of Strategic Business Development.
12-49 Sec. 468.002. COMPOSITION OF OFFICE. The office is an agency
12-50 of the state, composed of nine members appointed by the governor
12-51 with the advice and consent of the senate.
12-52 Sec. 468.003. TERMS. Members of the office serve staggered
12-53 terms of six years with the terms of three members expiring
12-54 February 1 of each odd-numbered year.
12-55 Sec. 468.004. EXECUTIVE DIRECTOR; STAFF. (a) The governor
12-56 shall, with the advice and consent of the senate, appoint an
12-57 executive director of the office.
12-58 (b) The executive director may employ staff as necessary to
12-59 implement this chapter.
12-60 Sec. 468.005. COMPENSATION AND EXPENSES OF OFFICE MEMBERS.
12-61 (a) An office member may not receive compensation or a benefit
12-62 because of the member's service to the office except as provided by
12-63 Subsection (b).
12-64 (b) For each day that an office member engages in the
12-65 business of the office, the member is entitled to:
12-66 (1) per diem, including compensatory per diem;
12-67 (2) actual expenses for meals and lodging; and
12-68 (3) transportation expenses.
12-69 (c) Compensation and expenses under Subsection (b) shall be
13-1 in the amount set by legislative appropriation.
13-2 Sec. 468.006. POWERS AND DUTIES. The office shall perform
13-3 the powers and duties assigned to the office under this chapter and
13-4 other law.
13-5 Sec. 468.007. RULES. The office may adopt rules for the
13-6 administration of this chapter.
13-7 Sec. 468.008. SUNSET PROVISION. The Office of Strategic
13-8 Business Development is subject to Chapter 325 (Texas Sunset Act).
13-9 Unless continued in existence as provided by that chapter, the
13-10 office is abolished and this chapter expires September 1, 2007.
13-11 SECTION 3.02. As soon as possible after the effective date of
13-12 this Act, the governor shall appoint nine members to the Office of
13-13 Strategic Business Development in accordance with Chapter 468,
13-14 Government Code, as added by this Act. The governor shall appoint
13-15 three members for terms expiring February 1, 2003, three members
13-16 for terms expiring February 1, 2005, and three members for terms
13-17 expiring February 1, 2007.
13-18 ARTICLE 4. MISCELLANEOUS
13-19 SECTION 4.01. Section 2308.052(b), Government Code, is
13-20 amended to read as follows:
13-21 (b) The council is composed of:
13-22 (1) three voting members who represent education, one
13-23 of whom represents local public education, one of whom represents
13-24 public postsecondary education, and one of whom represents
13-25 vocational education;
13-26 (2) five voting members who represent organized labor
13-27 appointed from recommendations made by recognized labor
13-28 organizations;
13-29 (3) five voting members who represent business and
13-30 industry, including business members serving on local workforce
13-31 development boards or private industry councils;
13-32 (4) two voting members who represent community-based
13-33 organizations; and
13-34 (5) the following ex officio voting members:
13-35 (A) the chair of the State Board of Education;
13-36 (B) the chair of the Texas Higher Education
13-37 Coordinating Board;
13-38 (C) the presiding officer of the Texas Board of
13-39 Human Services;
13-40 (D) the commissioner of the Department of
13-41 Agriculture [presiding officer of the policy advisory board of the
13-42 Texas Department of Economic Development]; and
13-43 (E) the chair of the Texas Workforce Commission.
13-44 ARTICLE 5. EFFECTIVE DATE
13-45 SECTION 5.01. This Act takes effect September 1, 2001.
13-46 * * * * *