H.B. No. 2421
AN ACT
relating to the use of an employer assessment to fund the Texas
Enterprise Fund and the skills development program and authorizing
the Texas Workforce Commission to develop new job incentive
programs.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 204.006(a), Labor Code, is amended to
read as follows:
(a) A person's contribution rate for the calendar year in
which the person becomes an employer is the greater of:
(1) the rate established for that year for the major
group to which the employer is assigned under Section 204.004, less
one-tenth of one percent; or
(2) two and six-tenths [seven-tenths] percent.
SECTION 2. Subchapter D, Chapter 204, Labor Code, is
amended by adding Section 204.0625 to read as follows:
Sec. 204.0625. ADJUSTMENT TO REPLENISHMENT TAX RATE. On
and after January 1, 2006, the replenishment tax rate computed
under Section 204.062 shall be adjusted to a rate computed by
subtracting one-tenth of one percent from the percentage computed
under Section 204.062(a).
SECTION 3. Chapter 204, Labor Code, is amended by adding
Subchapter G to read as follows:
SUBCHAPTER G. EMPLOYMENT AND TRAINING INVESTMENT ASSESSMENT; FUNDS
Sec. 204.121. EMPLOYMENT AND TRAINING INVESTMENT
ASSESSMENT. (a) In addition to any other taxes imposed under this
subtitle, an employment and training investment assessment is
imposed on or after January 1, 2006, on each employer paying
contributions under this subtitle as a separate assessment of
one-tenth of one percent of wages paid by the employer.
(b) The commission shall deposit the revenue from the
employment and training investment assessment to the credit of the
holding fund created under Section 204.122.
(c) The employment and training investment assessment is
due at the same time, collected in the same manner, and subject to
the same penalties and interest as other contributions assessed
under this subtitle.
Sec. 204.122. HOLDING FUND. (a) The employment and
training investment holding fund is a special trust fund outside of
the state treasury in the custody of the comptroller separate and
apart from all public money or funds of this state.
(b) The comptroller shall administer the holding fund in
accordance with the directions of the commission. Interest
accruing on amounts in the holding fund shall be deposited
quarterly to the credit of the compensation fund.
Sec. 204.123. TRANSFER TO TEXAS ENTERPRISE FUND, SKILLS
DEVELOPMENT FUND, TRAINING STABILIZATION FUND, AND COMPENSATION
FUND. (a) If, on September 1 of a year, the commission determines
that the amount in the compensation fund will exceed 100 percent of
its floor as computed under Section 204.061 on the next October 1
computation date, the commission shall transfer from the holding
fund created under Section 204.122:
(1) from the first $160 million deposited in the
holding fund in any state fiscal biennium:
(A) during the state fiscal biennium ending
August 31, 2007:
(i) 67 percent to the Texas Enterprise Fund
created under Section 481.078, Government Code, except that the
amount transferred under this paragraph may not exceed the amount
appropriated by the legislature to the Texas Enterprise Fund in
that biennium; and
(ii) 33 percent to the skills development
fund created under Section 303.003, except that the amount
transferred under this paragraph may not exceed the amount
appropriated by the legislature to the skills development program
strategies and activities in that biennium; and
(B) during any state fiscal biennium beginning on
or after September 1, 2007:
(i) 75 percent to the Texas Enterprise Fund
created under Section 481.078, Government Code, except that the
amount transferred under this paragraph may not exceed the amount
appropriated by the legislature to the Texas Enterprise Fund in
that biennium; and
(ii) 25 percent to the skills development
fund created under Section 303.003, except that the amount
transferred under this paragraph may not exceed the amount
appropriated by the legislature to the skills development program
strategies and activities in that biennium; and
(2) any remaining amount in the holding fund after the
distribution under Subdivision (1) to the training stabilization
fund created under Section 302.101.
(b) If, on September 1 of a year, the commission determines
that the amount in the compensation fund will be at or below 100
percent of its floor as computed under Section 204.061 on the next
October 1 computation date, the commission shall transfer to the
compensation fund as much of the amount in the holding fund as is
necessary to raise the amount in the compensation fund to 100
percent of its floor, up to and including the entire amount in the
holding fund. The commission shall transfer any remaining balance
in the holding fund to the Texas Enterprise Fund, the skills
development fund, and the training stabilization fund in the
percentages prescribed by Subsection (a).
SECTION 4. Chapter 302, Labor Code, is amended by adding
Subchapter F to read as follows:
SUBCHAPTER F. EMPLOYMENT AND TRAINING INVESTMENT ASSESSMENT
Sec. 302.101. TRAINING STABILIZATION FUND. (a) The
training stabilization fund is established as a special trust fund
outside of the state treasury in the custody of the comptroller
separate and apart from all public money or funds of this state.
The fund is composed of:
(1) money deposited to the fund under Section 204.123;
and
(2) any other money received for deposit in the fund.
(b) Money in the training stabilization fund may be used in
a year in which the amounts in the employment and training
investment holding fund are insufficient to meet the legislative
appropriation for that fiscal year for either the Texas Enterprise
Fund or the skills development program strategies and activities.
(c) Money in the training stabilization fund shall be
transferred to the Texas Enterprise Fund and the skills development
fund under Subsection (b) not later than September 30. The transfer
under Subsection (b) shall consist of transferring 67 percent of
the money in the training stabilization fund to the Texas
Enterprise Fund and 33 percent of the money in the training
stabilization fund to the skills development fund. The amount
transferred from the training stabilization fund may not exceed the
amounts appropriated to the Texas Enterprise Fund and skills
development program strategies and activities in the fiscal year in
which the transfer is made.
(d) Interest that accrues on the money in the training
stabilization fund shall be deposited quarterly to the credit of
the compensation fund.
SECTION 5. Chapter 303, Labor Code, is amended by adding
Section 303.0035 to read as follows:
Sec. 303.0035. USE OF MONEY IN HOLDING FUND (GENERAL
REVENUE ACCOUNT 5069) FOR SKILLS DEVELOPMENT. Money in the holding
fund (general revenue account 5069) may be used only for the
purposes for which the money in the skills development fund created
under Section 303.003 may be used.
SECTION 6. Section 303.005, Labor Code, is amended to read
as follows:
Sec. 303.005. PARTICIPATION IN ADDITIONAL PROGRAMS;
APPLICATION REQUIREMENTS; PRIORITY. (a) An employer may not apply
both to a public community or technical college for customized
training and assessment from the college through a grant issued to
the college under the skills development fund program established
under this chapter and for a grant under the Texas Enterprise Fund
[smart jobs fund] program established under Subchapter E [J],
Chapter 481, Government Code, unless the employer and the college
file an application for concurrent participation in both programs
that complies with any rules adopted by the Texas Workforce
Commission on concurrent participation [Section 481.1565,
Government Code].
(b) In awarding any grant under this chapter, the commission
shall consider giving priority to training incentives for small
businesses.
SECTION 7. Section 2308.308, Government Code, is amended to
read as follows:
Sec. 2308.308. PUBLIC COMMUNITY COLLEGE. A public
community college shall promptly provide workforce training and
services that are requested:
(1) by a board if the need for the training and
services is based on the labor market information system available
for the area;
(2) by employers located in the college's taxing
district when the request is presented directly to the college by
the employers or through the board; or
(3) as part of economic development incentives
designed to attract or retain an employer, including incentives
offered under the skills development [smart jobs] fund program
under [Subchapter J,] Chapter 303, Labor Code [481].
SECTION 8. The change in law made by this Act to Section
204.006(a), Labor Code, takes effect January 1, 2006.
SECTION 9. Except as provided by Section 8 of this Act, this
Act takes effect immediately if it receives a vote of two-thirds of
all the members elected to each house, as provided by Section 39,
Article III, Texas Constitution. If this Act does not receive the
vote necessary for immediate effect, this Act takes effect
September 1, 2005.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2421 was passed by the House on May
13, 2005, by a non-record vote; that the House refused to concur in
Senate amendments to H.B. No. 2421 on May 26, 2005, and requested
the appointment of a conference committee to consider the
differences between the two houses; and that the House adopted the
conference committee report on H.B. No. 2421 on May 29, 2005, by the
following vote: Yeas 140, Nays 1, 3 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2421 was passed by the Senate, with
amendments, on May 24, 2005, by the following vote: Yeas 31, Nays
0; at the request of the House, the Senate appointed a conference
committee to consider the differences between the two houses; and
that the Senate adopted the conference committee report on H.B. No.
2421 on May 29, 2005, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor