79(R) HB 2421 - House Committee Report version


                                                                                
79R14588 KSD-D


By:  Chavez                                                       H.B. No. 2421

Substitute the following for H.B. No. 2421:                                   

By:  Cook of Navarro                                          C.S.H.B. No. 2421



A BILL TO BE ENTITLED

AN ACT

relating to the use of an employer assessment to fund 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 H to read as follows:

SUBCHAPTER H.  SKILLS DEVELOPMENT ASSESSMENT; FUNDS
	Sec. 204.151.  SKILLS DEVELOPMENT ASSESSMENT.  (a)  In 
addition to any other taxes imposed under this subtitle, a skills 
development assessment is imposed on and 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 skills 
development assessment to the credit of the holding fund created 
under Section 204.152.
	(c)  The skills development 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. 204.152.  HOLDING FUND.  (a)  The holding fund is a 
special trust fund outside of the state treasury in the custody of 
the comptroller separate and apart from all other 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. 204.153.  TRANSFER TO SKILLS DEVELOPMENT FUND, SKILLS 
DEVELOPMENT ECONOMIC STABILIZATION FUND, AND COMPENSATION FUND.  
(a)  If, on September 1 of a year, the commission determines that 
the amount in the compensation fund is at or will exceed 100 percent 
of its floor as computed under Section 204.061 on the next October 1 
computation date, the commission shall transfer to the skills 
development fund created under Section 303.003 an amount from the 
holding fund created under Section 204.152 not to exceed the lesser 
of the amount appropriated by the legislature to the skills 
development fund in that year or 80 percent of the amount in the 
holding fund.  The commission shall transfer the remaining amount 
in the holding fund to the skills development economic 
stabilization fund created under Section 303.0032.
	(b)  If, on September 1 of a year, the commission determines 
that the amount in the compensation fund will be 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 skills development fund and skills development economic 
stabilization fund as prescribed by Subsection (a).
	SECTION 4.  Section 303.003, Labor Code, is amended by 
adding Subsection (b-1) to read as follows:
	(b-1)  The commission by rule may establish and develop 
additional job incentive programs that use the skills development 
fund to create incentives for public community and technical 
colleges in partnership with one or more employers to provide 
workforce training in an effort to create and retain employment 
opportunities in this state.
	SECTION 5.  Chapter 303, Labor Code, is amended by adding 
Sections 303.0031 and 303.0032 to read as follows:
	Sec. 303.0031.  USE OF MONEY IN HOLDING FUND (GENERAL 
REVENUE ACCOUNT 5069) FOR SKILLS DEVELOPMENT.  Money in the holding 
fund (general revenue account number 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.
	Sec. 303.0032.  SKILLS DEVELOPMENT ECONOMIC STABILIZATION 
FUND.  (a)  The skills development economic 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 other 
public money or funds of this state.  The fund is composed of:
		(1)  money transferred into the fund under Section 
204.153; and      
		(2)  gifts, grants, and other money received by the 
commission for deposit in the fund.
	(b)  Money in the skills development economic stabilization 
fund may be transferred to the skills development fund created 
under Section 303.003 not later than September 30 of any year in 
which the funds in the holding fund under Section 204.152 are 
insufficient to meet the legislative appropriation made for the 
skills development fund in that year.
	(c)  Interest accruing on money in the skills development 
economic stabilization fund shall be deposited quarterly to the 
credit of the compensation fund.
	SECTION 6.  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 7.  The change in law made by this Act to Section 
204.006(a), Labor Code, takes effect January 1, 2006.
	SECTION 8.  Except as provided by Section 7 of this Act, this 
Act takes effect September 1, 2005.