1. (a) The Skills Development Fund may be used by public community and technical colleges, TEEX, or community-based organizations only in partnership with the public community and technical colleges or the TEEX as start-up or emergency funds for the following purposes:

   1. (1) to develop customized training programs for businesses and trade unions; and
   2. (2) to sponsor small and medium-sized business networks and consortiums.
2. (b) TEEX training activities shall focus on programs that are statewide or are not available from a local junior college district, a local technical college, or a consortium of junior college districts. In developing such programs, TEEX may participate in a consortium of junior college districts or with a technical college that provides training under Texas Labor Code, Chapter 303.
3. (c) Technical college training activities shall focus on programs that are not available from a local community college, except in the technical college's local service area, and shall be encouraged to focus on programs that are statewide.

4. (d) The Skills Development Fund may not be used:

   1. (1) to pay the training costs and related costs of an employer who relocates the employer's worksite from one place in Texas to another;
   2. (2) for the purchase of any proprietary or production equipment required for the training program of a single local employer;
   3. (3) for wages for trainees; or
   4. (4) to pay for trainee or instructor travel costs or trainee drug tests.

5. (e) The Skills Development Fund may not be used to pay for the lease of equipment if any one of the following four criteria is characteristic of the lease transaction:

   1. (1) the lease transfers ownership of the equipment to the lessee at the end of the lease term;
   2. (2) the lease contains a bargain purchase option;
   3. (3) the lease term is equal to 75% or more of the estimated economic life of the leased equipment; or
   4. (4) the present value of the minimum lease payments at the inception of the lease, excluding executory costs, equals at least 90% of the fair value of the leased equipment.

Source Note:The provisions of this §803.3 adopted to be effective October 6, 1997, 22 TexReg 9695; amended to be effective January 25, 2000, 25 TexReg 391.