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79R9363 JMM-F
By: West, Royce, Brimer S.B. No. 1096
A BILL TO BE ENTITLED
AN ACT
relating to the operation, funding, and administration of the smart
jobs fund program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 302, Labor Code, is amended by adding
Subchapter F to read as follows:
SUBCHAPTER F. SMART JOBS FUND PROGRAM
Sec. 302.101. DEFINITIONS. In this subchapter:
(1) "County average weekly wage" means the average
weekly wage paid by all employers in a county that are covered by
unemployment compensation insurance, as determined by the
commission for the most recent period for which data is available.
(2) "Employee" means an individual who performs
services for another under a contract of hire, whether express or
implied, or oral or written.
(3) "Employer" means a person that employs one or more
employees.
(4) "Existing employer" means an employer that:
(A) has been liable to pay contributions under
Subtitle A for more than one year;
(B) has employees; and
(C) is in compliance with the reporting and
payment requirements of Subtitle A, as determined by the
commission.
(5) "Group health benefit plan" means:
(A) a health plan provided by a health
maintenance organization established under Chapter 843, Insurance
Code;
(B) a health benefit plan approved by the
commissioner of insurance; or
(C) a self-funded or self-insured employee
welfare benefit plan that provides health benefits and is
established in accordance with the Employee Retirement Income
Security Act of 1974 (29 U.S.C. Section 1001 et seq.).
(6) "In-kind contribution" means a noncash
contribution of goods and services provided by an employer as all or
part of the employer's matching share of a grant or project.
(7) "Job" means employment on a basis customarily
considered full-time for the applicable occupation and industry.
(8) "Large business" means a business entity that
employs at least 500 employees.
(9) "Medium business" means a business entity that
employs more than 99 but fewer than 500 employees.
(10) "Micro-business" means a business entity that
employs not more than 20 employees.
(11) "Minority employer" means a business entity at
least 51 percent of which is owned by minority group members or, in
the case of a corporation, at least 51 percent of the shares of
which are owned by minority group members and that:
(A) is managed and, in daily operations, is
controlled by minority group members; and
(B) is a domestic business entity with a home or
branch office located in this state and is not a branch or
subsidiary of a foreign corporation or other foreign business
entity.
(12) "Minority group members" includes:
(A) African Americans;
(B) American Indians;
(C) Asian Americans;
(D) Mexican Americans and other Americans of
Hispanic origin; and
(E) women.
(13) "Program" means the smart jobs fund program
created under this subchapter.
(14) "Project" means a specific employment training
project developed and implemented under this subchapter.
(15) "Provider" means a person that provides
employment-related training. The term includes employers,
employer associations, labor organizations, community-based
organizations, training consultants, public and private schools,
technical institutes, junior or community colleges, senior
colleges, universities, and career schools and colleges, as defined
by Section 132.001, Education Code.
(16) "Qualified job" means a job for which an
application has been submitted and that:
(A) pays at least 100 percent of the county
average weekly wage; and
(B) is covered by a group health benefit plan for
which the business offers to pay at least 50 percent of the premiums
or other charges assessed for employee-only coverage under the
plan, regardless of whether an employee may voluntarily waive the
coverage.
(17) "Small business" means a business entity that
employs more than 20 but fewer than 100 employees.
(18) "Trainee" means a participant in a project funded
under this subchapter.
(19) "Wages" means all forms of compensation or
remuneration, excluding benefits, payable for a specific period to
an employee for personal services rendered by that employee.
Sec. 302.102. SMART JOBS FUND PROGRAM; PURPOSE;
ADMINISTRATION. (a) The smart jobs fund program is created in the
division as a workforce development incentive program to enhance
employment opportunities for residents of this state and to
increase the job skills of the existing workforce by providing job
training assistance to businesses operating in, or relocating to,
this state.
(b) The program shall award grants for the creation and
retention of qualified jobs. At least 60 percent of the money spent
under the program shall be used for projects that assist existing
employers. At least 20 percent shall be used for employers that
relocate operations to this state.
(c) The commission by rule shall develop and adopt a scoring
system that evaluates the economic impact of grant applications and
reflects the criteria set forth in this subchapter. The executive
director shall use the scoring system and a competitive process to
award grants. It is the intent of the legislature that, to the
greatest extent practicable:
(1) money from the smart jobs fund be spent:
(A) in all areas of this state; and
(B) in approximate proportion to each region's
share of the state's population, civilian labor force, unemployed,
and submission of grant applications for qualified jobs; and
(2) grants shall be awarded to micro-businesses, small
businesses, medium businesses, large businesses, and minority
employers in a manner proportionate to the number of persons
employed by those categories of businesses.
(d) The commission shall determine appropriate means to
accomplish the goals of the program. As necessary to implement
those goals, the commission may work in conjunction with the
comptroller.
(e) The division shall administer the program.
(f) The executive director may employ personnel as
necessary to administer the program.
(g) In implementing provisions under this subchapter
regarding the classification of this state into regions, the
division shall use the uniform service regions established by the
comptroller under Section 120, Article V, Chapter 19, Acts of the
72nd Legislature, 1st Called Session, 1991 (the General
Appropriations Act).
Sec. 302.103. RULES. The commission shall adopt rules as
necessary to implement the program.
Sec. 302.104. FUNDING; RAINY DAY FUND. (a) The smart jobs
fund is established as a special trust fund in the custody of the
comptroller separate and apart from all public money or funds of
this state. The fund is composed of:
(1) gifts, grants, and other donations received by the
division for the fund; and
(2) any amounts appropriated by the legislature for
the program from the general revenue fund.
(b) The program is funded through the smart jobs fund.
(c) Money in the smart jobs fund may be used for program
administration, marketing expenses, and evaluation of the program.
These costs of the division in any fiscal year may not exceed the
lesser of:
(1) five percent of the total amount appropriated for
the program for that fiscal year; or
(2) $1.5 million.
(d) The smart jobs rainy day fund is established as a
special trust fund in the custody of the comptroller separate and
apart from all public money or funds of this state. The smart jobs
rainy day fund is composed of:
(1) money returned by employers or recouped by the
program under Section 302.111(d); and
(2) any other money received by the division for
deposit in that fund.
(e) The commission may authorize the executive director to
use money in the smart jobs rainy day fund if:
(1) the commission determines, after consulting with
the comptroller, that the smart jobs fund contains insufficient
money to cover the amounts appropriated by the legislature to
operate the program; and
(2) the commission has determined that:
(A) the unemployment rate in this state is 125
percent of the average unemployment rate in this state during the
preceding three years; or
(B) a severe economic dislocation is occurring in
a specific region of this state.
(f) The commission by rule shall define "severe economic
dislocation" for purposes of Subsection (e). In adopting a
definition, the commission shall consider employment-related
factors, including:
(1) massive layoffs in a region of this state caused
by:
(A) the closure of military bases;
(B) the effect of the implementation of the North
American Free Trade Agreement;
(C) employer relocations; or
(D) other analogous situations; and
(2) the number of jobs lost in a region compared to the
region's usual rates of employment.
(g) If the commission approves the use of money from the
smart jobs rainy day fund because of a severe economic dislocation
occurring in a specific region of the state, the executive director
may use the money allocated from the smart jobs rainy day fund
solely for projects located in the affected region.
(h) Notwithstanding any other provision of this section,
the total combined amount spent in any fiscal year from the smart
jobs fund and the smart jobs rainy day fund may not exceed the
amount appropriated by the legislature for that fiscal year for the
operation of the program.
(i) If, during any three consecutive months, the balance in
the smart jobs fund or the smart jobs rainy day fund exceeds 0.15
percent of the total taxable wages for the four calendar quarters
ending the preceding June 30, as computed under Section 204.062(c),
the executive director shall immediately transfer the excess from
the applicable fund to the unemployment compensation fund created
under Section 203.021.
Sec. 302.105. DESIGNATION OF PROGRAM FUNDS FOR ECONOMIC
DEVELOPMENT. A percentage of money in the smart jobs fund
determined by the General Appropriations Act shall be transferred
to the office of the governor for the purpose of attracting
businesses for economic development through the use of the program.
The governor shall determine the qualified recipients of the money
for the purpose of attracting businesses to the state in accordance
with commission rules and requirements for smart jobs grants. The
resulting smart jobs grants are exempt from Section 302.102(c) and
administered by the division.
Sec. 302.106. GRANTS. (a) The executive director may award
grants for projects that meet the requirements of this subchapter.
(b) A grant may not be awarded unless each employer
participating in the project certifies that:
(1) a job or job opening exists or will exist at the
end of the project for which the grant is sought; and
(2) the job or job opening will be filled by a
participant in the project.
(c) A grant may not be awarded unless each employer
participating in the project certifies that each job under the
project is covered by a group health benefit plan for which the
business pays at least 50 percent of the premiums or other charges
assessed for employee-only coverage under the plan.
(d) A grant may not be awarded for a project under this
section unless each employer participating in the project certifies
that the starting wage for a new job created through the project
will be equal to or greater than the county average weekly wage for
the county in which the job or project is located and that the wage
for a job existing on the date on which the project is scheduled to
begin will be increased to the greater of:
(1) three percent for a micro-business or small
business or five percent for a business that is not a micro-business
or small business over the wage in effect on the day before the date
on which the project is scheduled to begin for that job; or
(2) 100 percent of the county average weekly wage for
the county in which the job or project is located.
(e) An employer may apply for a grant under this subchapter.
On request by an employer, the executive director may grant a
modification of the requirements provided by Subsection (d) and
Section 302.109, if the commission has made the determination under
Section 302.104(e)(2).
(f) Grants awarded under this section for which the
executive director has modified the requirements of Subsection (d)
may not, in any fiscal year, exceed 10 percent of the total dollar
amount of grants awarded under the program in that year.
(g) Unless modified by the executive director under rules
adopted by the commission, a grant may not be awarded for a project
unless each employer participating in the project certifies that it
will continue to spend on nonmanagerial training an amount from
private sources equal to the average amount spent by that employer
on such training for the most recent two-year period.
(h) A grant may not be awarded for a project if the project
will impair existing contracts for services or collective
bargaining agreements, except that a project inconsistent with the
terms of a collective bargaining agreement may be undertaken with
the written concurrence of the collective bargaining unit and the
employer or employers who are parties to the agreement.
Sec. 302.107. GRANT APPLICATION; AWARDING OF GRANTS. (a)
The following may apply for a grant under this subchapter:
(1) one or more employers to secure training; or
(2) one or more employers acting in partnership with
an employer organization, labor organization, or community-based
organization to secure training.
(b) A grant application must be filed with the division in a
form approved by the executive director and, except as provided by
Subsection (c), must include a complete business and training plan,
including:
(1) the number and kind of jobs available;
(2) the skills and competencies required for the
identified jobs;
(3) the wages to be paid to trainees on successful
completion of the project;
(4) the goals, objectives, and outcome measures for
the project;
(5) the proposed curriculum for the project; and
(6) the projected cost per person enrolled, trained,
hired, and retained in employment.
(c) The commission by rule may exempt a micro-business from
the requirement to submit a business and training plan that
complies with Subsection (b). The commission by rule shall
establish a simplified application process for grant applications
from micro-businesses.
(d) The division may provide assistance with the
application process to all applicants and shall give priority to
assisting applicants who are small businesses or micro-businesses.
(e) The division shall minimize the length of the
application form and shall simplify as much as possible the review
process for grant applications.
(f) The division shall notify each applicant as to whether
the application is complete not later than the fifth business day
after the date on which the application is received by the division.
Sec. 302.108. PARTICIPATION IN ADDITIONAL PROGRAMS;
APPLICATION REQUIREMENTS. (a) A business may not apply both for a
grant under this subchapter and 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 Chapter 303 unless the business and
the college file an application for concurrent participation in
both programs.
(b) The commission by rule shall establish the requirements
for an application subject to this section.
Sec. 302.109. MATCHING REQUIREMENTS; EXEMPTIONS. (a)
Money provided under a grant for a project must be matched by
private funds provided by the employer benefiting from the project
in an amount at least equal to the amount provided by the grant.
(b) The commission may adopt rules modifying the
requirements of Subsection (a) for employers that are small
businesses or micro-businesses and may also adopt rules modifying
the requirements of Subsection (a) for projects that provide
significant economic benefits to an entire region of the state.
(c) Employer matches may include documented in-kind
contributions as well as wages paid to trainees during the training
period.
Sec. 302.110. TRAINEES. The program shall give priority to
residents of this state, including residents formerly sentenced to
the institutional division or the state jail division of the Texas
Department of Criminal Justice.
Sec. 302.111. CONTRACTS. (a) The executive director may
approve any project that meets the requirements of this subchapter.
If a project is approved and funds are available, the division shall
enter into a contract with the grant applicant and with each
employer participating in the project. The contract must specify
those skills and competencies to be gained as a result of the
project.
(b) Reimbursable costs in the contract may include only
those expenses related to direct training in job-related basic
skills, including literacy skills, job-related vocational skills,
and administrative costs. Total administrative costs for any
particular project may not exceed 10 percent of the project's
expenditures.
(c) Each contract must provide a schedule for payment of
smart jobs fund money. Twenty-five percent of allowable
expenditures shall be withheld by the division from each scheduled
payment for 90 days after the date of completion of the contract.
If at least 85 percent of the trainees in the project have been
retained in employment for that 90-day period, other than trainees
who leave the employment voluntarily for better-paying jobs, and
have successfully achieved the skills and competencies, wage
requirements, and other contractual obligations, the amount of
allowable expenditures withheld shall be remitted to the employer.
The commission by rule shall establish procedures as necessary to
verify that a trainee has left the employment for a better-paying
job. If there is a negative balance, the employer is liable for the
amount of the negative balance and shall remit that amount to the
division not later than the 30th day after the date on which the
employer is notified of the negative balance by the division.
(d) Each contract must state the term of the grant award. A
grant recipient who does not use all money awarded under the grant
for the prescribed purpose within the allotted term shall reimburse
the program by submitting the appropriate amount to the executive
director not later than the 30th day after the expiration date of
the term of the grant award. The executive director shall remit
money received under this subsection to the comptroller for deposit
in the smart jobs rainy day fund.
Sec. 302.112. SMART JOBS PROGRAM CONTRACT PROVISIONS. The
commission shall by rule require each smart jobs contract to have:
(1) clearly defined goals, outputs, and measurable
outcomes that directly relate to program objectives;
(2) clearly defined sanctions for noncompliance with
contract terms; and
(3) clearly specified accounting, reporting, and
auditing requirements for funds received under program contracts.
Sec. 302.113. SMART JOBS PROGRAM MONITORING PRACTICES. The
commission by rule shall adopt program monitoring practices that
include:
(1) risk assessment to determine which contracts have
the highest risk for fraud and abuse; and
(2) a method to obtain and evaluate program cost
information to ensure all costs, including administrative costs,
are reasonable and necessary to achieve program objectives.
Sec. 302.114. ANNUAL REPORT. (a) The commission shall
report to the governor and the legislature at the end of each fiscal
year on the status of the program.
(b) The annual report must include for that fiscal year:
(1) the total number of applications submitted, the
total number of applications approved, and the total number of
applications rejected, reported by region of the state and by size
of business;
(2) the number of employers receiving grants under the
program reported by region of the state and the percentage that
number represents of the total number of employers receiving grants
under the program on a statewide basis;
(3) the total amount of money awarded in each region of
the state and the percentage that amount represents of the total
amount of money awarded on a statewide basis;
(4) a comparison of the percentage of total dollars
awarded to each region versus each region's percentage of:
(A) the state's population;
(B) the civilian labor force;
(C) the number of unemployed persons; and
(D) the number of eligible grant applications for
qualified jobs submitted to the division;
(5) the value, expressed in dollars and as a
percentage of total training expenditures, of matching
contributions made by employers;
(6) the number of businesses, classified by
micro-businesses, small businesses, medium businesses, and large
businesses, that receive grants under the program reported by
region of the state and business size and the percentage that number
represents of the total number of each of those categories of
businesses receiving grants under the program on a statewide basis;
(7) the total amount of money awarded to
micro-businesses, small businesses, medium businesses, and large
businesses, reported by region of the state and business size, and
the percentage that amount represents of the total amount of money
awarded to those businesses on a statewide basis;
(8) the number of businesses located in enterprise
zones, as that term is defined by Chapter 2303, Government Code,
that receive grants under the program and the total amount of the
grants awarded to those businesses;
(9) the total number of jobs created, enhanced, or
retained under the program:
(A) by region of the state;
(B) by occupation, classified by the applicable
two-digit standard industrial classification;
(C) by wage level; and
(D) whether attributable to:
(i) relocation of businesses to this state,
including the percentage the number attributable to the relocation
of businesses represents of the total number of jobs created,
enhanced, or retained under the program on a statewide basis; or
(ii) training or retraining of employees of
existing employers, including the percentage that the number
attributable to the training or retraining of employees of existing
employers represents of the total number of jobs created, enhanced,
or retained under the program on a statewide basis;
(10) the average and median weekly wage levels of
trainees entering or returning to the workforce, broken down by
current employees undergoing retraining and new hires, at three
months and one year after the conclusion of their training;
(11) the number and percentage of participating
employers that provide workers' compensation insurance coverage
and the number and percentage of employees covered;
(12) the number and percentage of employees covered by
the group health benefit plan offered by the employer;
(13) the number and percentage of women, disabled
persons, and minority group members receiving grants under the
program as employers, participating as trainees in training
projects, or participating in the program as providers, broken out
by group;
(14) a list of modifications granted under Section
302.106(e), the name of the project for which the modification was
granted, and the reason the executive director granted the
modification; and
(15) the number of trainees who have left employment
with a grant recipient because the trainee has obtained a
better-paying job, as verified under Section 302.111(c).
(c) In addition to the information required under
Subsection (b), the commission shall include in the annual report,
for each region of the state in which a grant is awarded, the
percentage paid by employers in that region of the total amount of
unemployment insurance contributions paid by employers during the
preceding calendar year.
Sec. 302.115. EXPIRATION. This subchapter expires
December 31, 2009.
SECTION 2. Subchapter A, Chapter 204, Labor Code, is
amended by adding Section 204.0065 to read as follows:
Sec. 204.0065. TEMPORARY INITIAL CONTRIBUTION RATE.
Notwithstanding Section 204.006, on and after January 1, 2006, a
person's contribution rate shall be two and six-tenths percent
until the date the experience rate computed under Section 204.041
takes effect for the employer. This section expires December 31,
2009.
SECTION 3. Subchapter D, Chapter 204, Labor Code, is
amended by adding Section 204.0625 to read as follows:
Sec. 204.0625. TEMPORARY 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 0.1 from the quotient computed under Section
204.062(a). This section expires December 31, 2009.
SECTION 4. Chapter 204, Labor Code, is amended by adding
Subchapter G to read as follows:
SUBCHAPTER G. EMPLOYMENT TRAINING INVESTMENT ASSESSMENT; FUNDS
Sec. 204.121. EMPLOYMENT TRAINING INVESTMENT ASSESSMENT.
(a) In addition to any other taxes imposed under this subtitle, an
employment training investment assessment is imposed on each
employer paying contributions under this subtitle as a separate
assessment of 0.1 percent of wages paid by the employer.
(b) The commission shall deposit the revenue from the
employment training investment assessment to the credit of the
holding fund created under Section 204.122.
(c) The employment investment training 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 holding fund is a
special trust fund 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 SMART JOBS FUNDS, SKILLS
DEVELOPMENT 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) 50 percent of the amount in the holding fund to the
smart jobs fund created under Section 302.104;
(2) 30 percent of the amount in the holding fund to the
skills development fund created under Section 303.003; and
(3) 20 percent of the amount in the holding fund to the
smart jobs rainy day fund created under Section 302.104.
(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 smart jobs fund, the skills development
fund, and the smart jobs rainy day fund in the percentages
prescribed by Subsection (a).
Sec. 204.124. EXPIRATION. This subchapter expires December
31, 2009.
SECTION 5. Section 19.011(a), Education Code, is amended to
read as follows:
(a) In order to achieve the goals stated in Section 19.003,
the district with the cooperation of the Health and Human Services
Commission, the Texas Workforce Investment Council, the Texas
[Department of] Economic Development and Tourism Office, the Texas
Workforce Commission, and the department shall provide persons
confined or imprisoned in the department:
(1) information from local workforce and development
boards on job training and employment referral services; [and]
(2) information on the tax refund voucher program
under Subchapter H, Chapter 301, Labor Code; and
(3) information on the smart jobs program under
Subchapter F, Chapter 302, Labor Code.
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 smart jobs fund program under Subchapter F [J],
Chapter 302, Labor Code [481].
SECTION 7. Section 303.005, Labor Code, is amended to read
as follows:
Sec. 303.005. PARTICIPATION IN ADDITIONAL PROGRAMS;
APPLICATION REQUIREMENTS. 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 smart jobs fund program
established under Subchapter F [J], Chapter 302 [481, Government
Code], unless the employer and the college file an application for
concurrent participation in both programs that complies with
Section 302.108 [481.1565, Government Code].
SECTION 8. Section 306.007(a), Labor Code, is amended to
read as follows:
(a) To assist in the reintegration into the labor force of
persons formerly sentenced to the institutional division or the
state jail division, the commission through Project RIO shall
provide:
(1) to those persons:
(A) information from local workforce development
boards on job training and employment referral services;
(B) information from the Department of State
Health Services [Texas Commission on Alcohol and Drug Abuse] on
substance abuse treatment services;
(C) information from the Texas Department of
Housing and Community Affairs on housing services;
(D) information from the Texas Veterans
Commission on services for veterans; and
(E) information on tax refund voucher programs
under Subchapter H, Chapter 301; and
(2) to the employers and potential employers of those
persons:
(A) information [from the Texas Department of
Economic Development] on the enterprise zone program under Chapter
2303, Government Code; [and]
(B) information from local workforce development
boards on services listed in Section 2308.304, Government Code;
and
(C) information on the smart jobs fund program
under Subchapter F, Chapter 302.
SECTION 9. The Texas Workforce Commission shall adopt rules
to implement Subchapter F, Chapter 302, Labor Code, as added by this
Act, not later than December 31, 2005.
SECTION 10. This Act takes effect September 1, 2005.