10 TAC 186.301, 186.302, 186.305-186.308
The Texas Department of Economic Development (department)
proposes amendments to the Smart Jobs Fund Rules, Subchapter C. Application
for Grants, §§186.301, 186.302, and 186.305-186.308. The amendments
are proposed pursuant to Government Code §§481.0044(a), authorizing
the governing board of the department to adopt rules necessary for the administration
of department programs, and 481.153, directing the governing board to adopt
rules as necessary to implement the Smart Jobs Fund program, as well as Government
Code, Chapter 2001, Subchapter B, Rulemaking, setting forth the state agency
rulemaking process. Government Code, Chapter 481, Subchapter J, is affected
by these amendments.
The proposed amendments clarify grant eligibility requirements, provide
per employee training cost caps, clarify information required from training
consortia, clarify permissible travel costs, provide for division of funds
into categories and dedication of funds for high impact economic development
projects, and provide for quarterly allocation of funds and scoring of applications.
Some language has been changed to more accurately reflect statutory language
and statutory intent. Some organizational changes and non-substantive grammatical
corrections have been made.
Amendments to §186.301 provide cost per job caps for businesses that
receive grant funds under the program.
Amendments to §186.302 clarify the information required in the application
regarding the size of the business or businesses applying for grant funds
and whether the employer would provide the training regardless of whether
grant funds were awarded. The amendments also clarify the amount of grant
funds that may be expended for travel.
Amendments to §186.305 clarify the application review process, provide
that the executive director will attempt to award 50% of funds to small businesses
and may dedicate up to 10% of funds for high impact economic development projects,
and provide for funding of consortiums made up of both large and small businesses.
Amendments to §186.306 provide for scoring of applications quarterly
on a competitive basis.
Amendments to §§186.307 and 186.308 are grammatical changes or
changes that more accurately reflect current program practices.
Jim Richardson, Director of the Smart Jobs Program, has determined that
for each year of the first five years that the proposed amendments are in
effect no additional cost to the state and to local governments, no reductions
in costs to the state and to local governments, and no loss or increase in
revenue to the state or to local governments is expected as a result of enforcing
or administering the amendments, and that enforcing or administering the amendments
does not have foreseeable implications relating to cost or revenues of the
state or local governments.
Mr. Richardson has further determined that there is no probable cost to
persons required to comply with the amendments, other than any resources used
to complete a Smart Jobs Fund application by businesses that voluntarily participate
in the program. Mr. Richardson has determined that the public benefits expected
as a result of adopting the proposed amendments include increased economic
growth, more equitable distribution of program grant funds, and more efficient
program administration.
Written comments on the proposed amendments may be addressed to Mr. Richardson
at the department, P.O. Box 12728, Austin, TX 78711-2728, or delivered to
1700 N. Congress Avenue, Austin, TX 78701. Comments may be faxed to Mr. Richardson
at (512) 936-0415. No comments received before publication of the proposed
amendments in the
Texas Register
or later
than 30 days after the date of publication will be considered.
§186.301. Eligibility.
(a)
The department shall evaluate applications submitted by
one or more employers or by one or more employer organizations, labor organizations,
community-based organizations or providers acting in partnership with one
or more employers. Only businesses that have been in operation for at least
one year are eligible to receive a grant. An employer that is rendering services
to a Smart Jobs Fund contractor and receiving grant monies for these services
is not eligible to receive a grant during the contract period. All businesses
must demonstrate financial soundness and fulfillment of state tax obligations
before they can receive a grant from the department.
(b)
The cost per job is calculated by dividing the total project
cost by the number of jobs.
The cost per job may not exceed $1,200 per
trainee for a large business or $2,500 per trainee for a small business.
(c)
Unless one of the conditions set forth
in §481.155(a)(1-6) is met, grants awarded by the department shall meet
the following two tests: the combination of grants in any fiscal year to a
single employer may not exceed $1,500,000, and no grant or combination of
grants in any fiscal year to a single employer may exceed 10% of the median
annual wages of the new or existing jobs being created or retained with the
grant.
§186.302 Application Requirements.
(a)
One or more employers; one or more employers acting in
partnership with an employer organization, labor organization, or community-based
organization; or one or more employers acting in partnership with a consortium
composed of one or more providers may submit an application for a grant under
the Smart Jobs Fund:
(b)
Employee leasing firms, including firms contracting for
temporary employees, are not eligible for a grant. Employees obtained from
agreements with such firms are not eligible to participate as trainees unless
the employer complies with the applicable certification requirements of this
chapter.
(c)
Grant applications must be filed in a form approved by
the department and must include a complete business and training plan and
a project budget with a line item breakdown of costs.
(d)
Business and Training Plan. Grant funds awarded hereunder
shall pay for job-related occupational skills training and job-related basic
skills training that enhance the employer's ability to carry out its business
plan. Job-related basic skills must be integrated as part of the job-related
occupational skills training curricula. An approved business and training
plan will become part of any contract for grant funds awarded. The business
and training plan will specify project start dates and project end dates.
Up to four project periods may be specified by the employer. Each business
and training plan must contain the information required by the Smart Jobs
Fund, §481.156(b). Each business and training plan shall also:
(1)
describe how the proposed training is consistent with,
and will enhance the employer's ability to carry out, its business plan to
retain and increase its competitiveness;
(2)
describe the skills training curricula for each project,
including the number of hours each participant will spend in classroom training,
on-the-job training, and/or other employer-designed training components, to
be funded by the grant and specify the training provider for each curricula;
(3)
describe the skills and the competencies the employer
expects the participant to achieve upon completion of training;
(4)
describe the method(s) used to assess each participant's
competencies in the skills for which the project will train both immediately
prior to the start date of the project and upon completion of training;
(5)
specify the projected cost per job which is calculated
by dividing the total Smart Jobs Fund grant amount by the number of jobs;
(6)
specify the geographic location, number and kind
of jobs that will be available at the end of the project and the wages to
be paid on completion of the project, and
(7)
specify the geographic location of all training to
be provided with grant funds. All trainee travel will be specified in the
proposed budget. All trainee travel outside the geographic location in which
the employer is located and all trainee travel to locations outside of Texas
will be at the discretion of the executive director as specified in the contract.
No trainee travel will be reimbursed from grant funds for any purpose other
than training as specified in the employer's business and training plan.
(e)
The application shall include the following information:
(1)
whether the employer is a small business [
with less
than 100 employees or $1 million or less in annual gross receipts
] or
a micro-business [
with 20 employees or less
]; [
and
]
(2)
whether the employer is a minority group member,
and if so, to which minority group the employer belongs
;
[
.
]
(3)
if the application is from a consortium,
the number of businesses that are small businesses, micro-businesses, and
large businesses and the number of employees to be trained for each; and
(4)
whether the employer would provide
the training but for the Smart Jobs grant funds.
(f)
Budget. Each application shall include a budget with line
item breakdown of costs consistent with the requirements of the Smart Jobs
Fund and these rules. The budget shall include three parts:
(1)
specification of costs related to direct training;
(2)
specification of administrative costs;
(3)
specification of matching contributions. An approved
budget with line item breakdown of costs will become part of any contract
for grant funds awarded hereunder.
(A)
Costs related to direct training may include: tuition;
fees; books and classroom materials; instructor wages and salaries and reasonable
benefits if the instructor is not an employee of a public education institution
if grant funds are paying tuition and fees; instructor and trainee travel
and per diem outside the employer's specified region of the state (limited
to 10% of the [
total
]
other direct-related training
costs [
related to direct training
]) with per diem expenses not
to exceed the State of Texas allowable rates; reasonable equipment lease or
rental costs during the term of the project; reasonable costs of pre- and
post-training participant assessment, costs of purchasing approved curricula
specified in the applicant's business and training plan if there is not already
a course offering at a convenient public education institution for which the
grant is paying tuition and fees; wages, salaries, and reasonable benefits
of instructional aides and trainees' counselors if such personnel are not
employees of a public education institution if grant funds are paying tuition
and fees; and other such reasonable costs related to direct training.
(B)
Reimbursement for costs related to direct training will
not include the lease, rental, purchase, or construction of facilities, the
purchase of capital equipment, salaries, wages, or benefits paid to personnel
assigned to manage or report on the project or the contract agreement.
(C)
Administrative costs may include the lease or rental of
facilities except those facilities belonging to public education institutions
where the curriculum specified in the business and training plan will be provided
and for which the grant is paying tuition and fees; salaries, wages, and reasonable
benefits paid to personnel assigned to manage or report on the project or
the contract agreement; and other such reasonable expenses not included in
costs related to direct training as are necessary to the successful completion
of the project. Administrative costs are limited to 10% of costs related to
direct training incurred by the training project(s).
(D)
Employers with fewer than 50 employees receiving a grant
must provide a matching amount of private funds in an amount at least equal
to 10% of the total project cost. Projects that provide significant economic
benefits to an entire region of the state may have all matching requirements
waived at the discretion of the executive director. Such projects must provide
information describing the region to which benefits will accrue and projected
economic information which may include other relevant macroeconomic and microeconomic
data that shows positive effects on the region's average weekly wage, tax
base, employment rates, family income, purchasing power, expenditures on unemployment
insurance, Aid to Families with Dependent Children, Medicaid, and other public
assistance, and the availability of job openings in demand, emerging, or manufacturing
occupations. Employers may meet matching requirements by providing in-kind
contributions. Documentation for in-kind contributions which are submitted
as part of the employer's match must specify the dollar value of facilities,
equipment, personnel, and consumable supplies contributed to the project.
New equipment will be valued at cost. Existing equipment and facilities will
be valued on a pro rata basis for the time used for training consistent with
the United States Internal Revenue Service depreciation schedules for such
assets based on data provided by the employer. Personnel contributions will
be valued on a pro rata basis for the time spent on the project. In-kind contributions
may not include the value of facilities, equipment, or personnel existing
in public education institutions where such resources already are available
to the employer as part of the institution's course offerings and for which
the grant is paying tuition and fees. In-kind contributions may match either
costs related to direct training or administrative costs. The sum of costs
related to direct training and administrative costs will be used to determine
the total matching costs required for any grant awarded.
(E)
The Smart Jobs Fund may reimburse nominal and reasonable
costs of preparing an application for small and micro-businesses and shall
not reimburse an applicant or any employer for retroactive training costs
incurred prior to the start date of the contract.
(g)
Application process and time line.
(1)
Any eligible entity desiring to request funds from the
Smart Jobs Fund shall submit an application for funding.
(2)
Within three business days after receiving an oral
or written request for an application from an applicant, the department shall
send an application packet to the applicant.
(3)
Within ten business days after receiving an application,
the department shall notify the applicant whether the application is complete.
If the application is incomplete, the department shall specify in a letter
the additional information required to complete the application. With this
notification to the applicant, the department shall identify a contact person
on its staff who is available to assist the applicant in completing the application.
The application will be placed in an inactive status if the requested additional
information is not received within 30 business days from date of notification
letter.
(4)
Within 30 business days after an application is complete,
the executive director will act on the application. In acting on the application,
the executive director may approve the application and award a grant; approve
the application pending the award of the grant; disapprove the application;
or request the applicant to modify all or part of the application.
§186.305. Funding; Grants.
(a)
The executive director shall
evaluate all completed
applications to determine their eligibility for funding
[
attempt
to award a grant for all approved projects
], subject to the availability
of funds. To ensure availability of funds throughout the fiscal year,
the department shall attempt to ensure that 50% of the money spent under
the program shall be used for small businesses. The
[
the
]
executive director
will
[
may
] award grants based on
a quarterly allocation of funds. In deciding which projects to fund, the executive
director shall be guided by the funding priorities
and the scores achieved
by each application as
set forth [
below
] in Section 186.306
of this title (relating to Funding Priorities).
(b)
To meet the legislative priorities and goals established
for the program, the executive director may divide the funds appropriated
for the program into separate categories. This includes funding categories
for large businesses, small businesses, and for high impact economic development
projects. At the beginning of each fiscal year, beginning September 1, 1998,
the executive director may dedicate up to 10% of the total grant funding available
to the program to fund high impact economic development projects
[
In June of each year, the Policy Board shall review the funding priorities
set forth below in Section 186.306 and advise the executive director about
changes to those priorities
].
(c)
If an application is from a consortium
comprised of large and small businesses, funding for the large business trainees
will originate from the large business funding category, as defined under
subsection (b) of this section, and funding for small business trainees will
originate from the small business category, as defined under subsection (b)
of this section. In the event that no funds are available in the large business
funding category, the consortium may be funded from the small business funding
category provided that at least 51% of the employees being trained are from
small businesses.
§186.306. Funding Priorities.
(a)
Program
[
Only program
] objectives
and priorities outlined in the Smart Jobs Fund Act and General Provisions
and these rules
will be considered in evaluating applications for funding
.
[
, including:
]
[
(1)
At least 60% of the money spent under the
program shall be used for projects that assist existing employers.]
[
(2)
Shall attempt to ensure that 50% of the
money spent under the program shall be used for projects that assist employers
with fewer than 100 employees or less than $1 million in annual gross receipts.]
[
(3)
Shall attempt to ensure that 20% of the
money spent under the program be used for projects that assist minority employers.]
[
(4)
Shall to the greatest extent practical
spend money from the smart jobs fund in all areas of the state.]
(b)
The department will develop a scoring mechanism to be
used for
scoring applications on a competitive basis by quarter. Applications
not funded may be considered in the following quarter, except for applications
received in the last quarter of each fiscal year. No application will be considered
for funding after two quarterly allocations. The scoring mechanism will determine
which applications will be funded during each allocation period.
[
businesses, with 100 or more employees and greater than $1 million in annual
gross receipts that gives priority to funding applications
]
The
scoring mechanism will include, but will not be limited to
[
based
on
] the following criteria:
(1)
business status, including
small businesses,
minority businesses,
and
existing businesses[
, and businesses
located in an Enterprise Zone
];
(2)
[
statewide
] distribution of
funds
including providing funds to all areas of the state, to under-served areas
[
businesses receiving grants under the program
] and
to
first-time
applicants
[
grantees
];
(3)
business impact such as the economic impact
of the project on the community, region, and the State. Factors to be considered
include the amount of capital investment and number of jobs created or retained
relative to the population of the area
[
the regional impact of the
project, the international impact, and involvement in defense conversion activities
];
(4)
business type including whether it is a base
industry to the community and an industry targeted by the State of Texas;
(5)
the quality of the jobs
to be created
or retained as a result of the training. This includes those jobs that are
family wage jobs, in manufacturing occupations, in emerging occupations, or
jobs in a demand occupation that provides high-skill, high-wage jobs in high-technology
areas;
[
including manufacturing occupations and occupations in
technological areas, wage levels, benefits, and whether the trainees are Texas
residents formerly sentenced to the institutional division of the state jail
division of the Texas Department of Criminal Justice.
]
(6)
the factors set forth in Government
Code, Section 481.155(a)(1) through (5);
(7)
the employer's certification that
the training to be funded would not be provided but for Smart Jobs funding;
and
(8)
whether the recipients of the job
training are Texas residents, including residents formerly sentenced to the
institutional division of the state jail division of the Texas Department
of Criminal Justice.
(b)
In June of each year, the Governing Board
shall review the funding priorities set forth in this section and advise the
executive director about changes to those priorities.
§186.307. Provider Eligibility.
An employer that has a contract under the Smart Jobs Fund
cannot
[
can not
] receive Smart Jobs fund grant monies for services
rendered to another Smart Jobs Fund contractor during the contract period.
§186.308. Contracts and Contract Amendments.
(a)
The department shall enter into a contract with each employer
or employer designee participating in the project. Contract amendments must
be requested in writing at least 30 days prior to the
implementation
of the
proposed changes [
and must be executed before changes are
implemented
]. Acceptance of the requested amendment is within the discretion
of the executive director of the department. Amendments will not be made during
the final quarter of the training project. Contracts and contract amendments
will be executed by the authorized employer's representative and the department
executive director or executive director designee.
(b)
Within 30 calendar days after the expiration of the 90-day
retention period for each project, the employer shall submit to the department
for verification the employment records for each trainee and other such data
as the department may require to verify training and employment.
(c)
If all trainees specified in each project have been retained
in employment 90 days subsequent to that project end date 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(s). Notwithstanding any other provision of these rules, an
attrition rate of 15% is allowed based on the total number of jobs as outlined
in the contract. The executive director may approve different numerical caps
for micro-businesses only based on one of the following requirements: The
employer must certify:
(1)
that it is required to reduce or eliminate the employer's
work force because of reductions in overall employment within an industry;
or
(2)
that a substantial change in the skills required
to continue the employer's business exists because of technological changes;
or
(3)
that other reasonable factors, as determined by the
executive director, exist.
(4)
Attrition is verified 90 days after the end of the
contract or 90 days after the end of each project period as defined in the
contract. For attrition beyond the level specified in the contract, allowable
expenditures will be reduced for each trainee who is not retained in employment
at the end of the 90-day retention period by the amount of the average per-trainee
training costs for a trainee. If there is a negative balance, the employer
is liable for the amount of the negative balance and shall remit that amount
to the department not later than the 30th day after the date of correspondence
on which the employer is notified of the negative balance by the department.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of the Secretary of State, on
January 12, 1998.
TRD-9800405
W. Lane Lanford
Chief Administrative Officer
Texas Department of Economic Development
Earliest possible date of adoption: February 23, 1998
For further information, please call: (512) 936-0181