SENATE BILL REPORT

SB 5457

BYSenators Warnke, Smitherman and Bender

Providing for determination of dislocated workers.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):February 6, 1989

Senate Staff:Jack Brummel (786-7428)

AS OF FEBRUARY 6, 1989

BACKGROUND:

The Legislature created two state sales tax deferral programs to stimulate investment in the state.  Investment tax credits have the potential of displacing workers because in many instances less labor is required to operate more modern machinery or equipment.

State statute defines a dislocated worker as an individual who is unlikely to return to work in the individual's previous occupation or industry because of a diminishing demand for his or her skills.  A dislocated worker may continue to draw unemployment benefits if he or she is making satisfactory progress in a training program approved by the Commissioner of the Department of Employment Security.

There is no requirement that workers who lose their jobs due to modernization undertaken for a sales tax deferral be classified as dislocated workers or receive job training.

SUMMARY:

If an individual loses his or her job as a result of a business's utilization of a state sales tax deferral for either distressed areas or out-of-state businesses, then the unemployed individual is deemed to be a dislocated worker.  Such a dislocated worker must be approved for commissioner-approved job training by the Department of Employment Security if the request for training is reasonable.

The Department of Employment Security must report annually to the Legislature regarding any job displacement resulting from the statewide and distressed area sales tax deferral programs.

Appropriation:    none

Revenue:    none

Fiscal Note:      none requested