HBA-RBT H.B. 1079 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1079
By: Keffer
Economic Development
3/24/1999
Introduced



BACKGROUND AND PURPOSE 

The legislature created the Smart Jobs Program (program) in 1993.  H.B.
1079 revises the program by clarifying the its goals, setting aside funds
for longitudinal research, allocating program funds to businesses based on
the number of persons they employ, simplifying the application review and
grant award processes, and making application information confidential. 
 
RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the governing board of the Texas
Department of Economic Development in SECTION 3 (Section 481.1525,
Government Code), and it is the opinion of the Office of House Bill
Analysis that rulemaking authority previously delegated to the policy board
has been delegated to the governing board of the Texas Department of
Economic Development in SECTION 8 (Section 481.157, Government Code) of
this bill. 
 
SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 481.151, Government Code, to delete the
definitions of "business development," "demand occupation," "emerging
occupation," "family wage job," "manufacturing occupation," "state average
weekly wage," and "targeted industry."  Defines "large business" and
"medium business."  Redefines "micro business" and "small business."
Redesignates Subsections (4)-(7), (9)-(10), (12)-(18), (21)-(22), to
(1)-(4), (5)-(6), (9)-(15), (16)-(17). 

SECTION 2.  Amends Section 481.152, Government Code, to delete a provision
that requires the smart jobs fund program to give priority to the creation
and retention of family wage jobs and focus on employers in industries that
promote high-skill, high-wage jobs in high technology areas and on demand
occupations that provide those jobs.  Redesignates Subsections (c) and (d)
to (b) and (c). 

SECTION 3.  Amends Subchapter J, Chapter 481, Government Code, by adding
Section 481.1525, as follows: 

Sec.  481.1525.  PROGRAM GOALS.  Requires the smart jobs fund program
(program) to emphasize the creation and retention of high-skill, high-wage
jobs and occupations that provide those jobs.  Requires the program to
specifically give priority to high impact economic development projects and
job training designed to improve the competitiveness of businesses in this
state.  Requires the governing board, by rule, to define the requirements
for a high impact development project and to determine the percentage of
the smart jobs fund that may be allocated to those projects and to the
retention of existing jobs.  Requires the governing board to determine
appropriate means to accomplish the goals of the program. Authorizes the
governing board to work in conjunction with the Texas Workforce Commission
and the comptroller in implementing those goals. 

SECTION 4.  Amends Section 481.154(c), Government Code, to require the
department to use money from the smart jobs fund, in a percentage set by
the governing board of the Texas Department of Economic Development
(governing board), to monitor the subsequent employment experiences of
persons who participate in the program as trainees in order to evaluate the
long-range effect of the program.  Requires the Texas Workforce Commission
to cooperate with the Texas Department of  Economic Development
(department) in implementing this subsection. 

SECTION 5.  Amends Section 481.155, Government Code, to require that grants
from the fund be awarded to micro businesses, small businesses, medium
businesses, and large businesses in a manner proportionate to the number of
persons employed by those categories of businesses.  Requires the
department to use labor market information maintained by the Texas
Workforce Commission to identify the size of a business.  Authorizes the
executive director to award a grant in excess of $250,000, rather than
$1,500,000, under specified conditions.  Requires the executive director to
attempt to ensure that at least 20 percent of the total dollar amount of
grants awarded to micro businesses, small business, medium businesses, and
large businesses are awarded to minority employers.  Requires the governing
board to make the final decision on grant applications involving a high
impact development project or which request an award of at least
$1,000,000.  Redesignates existing Subsections (b), (c)-(h), and (j), to
(c), (e)-(j), and (k), respectively.  Deletes existing Subsection (i).
Makes conforming and nonsubstantive changes. 

SECTION 6.  Amends Section 481.156, Government Code, as follows:

Sec.  481.156.  New title: GRANT APPLICATION; AWARDING OF GRANTS.  Requires
the executive director to establish multiple application review and grant
award tracks as provided by this section.  Authorizes the department to
award grants to specified employers. Provides that a grant application must
comply with requirements adopted under this subchapter and any rules
adopted by the governing board.  Requires the executive director to
establish a quarterly, competitive application process for grant
applications submitted by large businesses or those requesting an award of
more than $250,000.  Requires the governing board to ensure that the
complexity of the application process appropriately corresponds to the size
of the business and the amount of funds awarded under the grant. Requires
the executive director to establish a simplified application process for
grant applications from small businesses and micro businesses and ensure
that the application process for small businesses and micro businesses is
open and ongoing.  Authorizes the department to provide assistance with the
application process to applicants who are large businesses or medium
businesses, and requires the department to assist small businesses or micro
businesses.  Requires the department to simplify the review process for
grant applications.  Makes conforming and nonsubstantive changes. 

SECTION 7.  Amends Subchapter J, Chapter 481, Government Code, by adding
Section 481.1565, as follows: 

Sec.  481.1565.  CONFIDENTIALITY REQUIREMENTS.  Provides that information
provided by an applicant in a grant application is confidential information
for purposes of Chapter 552, Government Code (Public Information), only as
provided by this section. Provides that information contained in an
application which is denied is confidential. Provides that information,
other than financial information, provided by an applicant whose
application is granted and who accepts an award is confidential information
only if the information would otherwise be confidential under the terms of
Chapter 552.  Provides that financial information is confidential
information for one year after the date on which the grant is awarded and,
after that, only if the information would otherwise be confidential under
the terms of Chapter 552.   

SECTION 8.  Amends Section 481.157(b), Government Code, to authorize the
governing board, rather than the policy board, to adopt rules modifying the
requirements of Subsection (a) for employees who are small businesses or
micro businesses, rather than businesses with fewer than 50 employees. 

SECTION 9.  Amends Section 481.159(a) and (c), Government Code, to
authorize the executive director or governing board to approve projects.
Provides that trainees who leave the employment voluntarily are not to be
included in the percentage of employees who are retained.  Makes conforming
and nonsubstantive changes. 

SECTION 10.  Amends Section 481.160(b), Government Code, to provide that
the annual report for  each fiscal year must include the total number of
grant applicants classified by micro businesses, small businesses, medium
businesses, and large businesses.  Redesignates existing Subdivisions
(b)(1)-(13) to (b)(2)-(14), respectively.  Makes conforming and
nonsubstantive changes. 

SECTION 11.  Amends Section 204.006(a), Labor Code, to make the alternate
contribution rate 2.6 percent, rather than 2.7 percent. 

SECTION 12.  Amends Section 204.062(a), Labor Code, by subtracting 0.1 from
the amount of the replenishment tax computation. 

SECTION 13.  Repealer: Sections 481.158, Government Code (Trainees),
481.161, Government Code (Expiration), 204.0065, Labor Code (Temporary
Initial Contribution Rate), 204.0625, Labor Code (Temporary Adjustment to
Replenishment Tax Rate), and 204.124, Labor Code (Expiration), are
repealed. 

SECTION 14.  Makes application of this Act prospective to January 1, 2000.

SECTION 15.  Effective date: September 1, 1999.

SECTION 16.  Emergency clause.