Skills Development Fund

The Skills Development Fund is a workforce training grant program administered by the Texas Workforce Commission, a state agency responsible for overseeing workforce development initiatives across Texas. The program is funded through appropriations from the Texas Legislature and is designed to strengthen the state’s economy by enhancing the skills and earning potential of its workforce. By partnering with educational institutions and workforce entities, the fund supports customized training solutions that align with the needs of Texas businesses and industries. The primary purpose of the program is to provide funding for training new and incumbent workers in order to upgrade skills, increase wages, and support job creation. The program emphasizes employer-driven training projects that are tailored to specific workforce needs. Training must be customized to the participating business partners, which involves adapting curriculum, scheduling, and delivery methods to match real-world operational requirements. The program prioritizes projects that demonstrate positive economic impact, including job creation, wage growth, and workforce stability. Eligible applicants include public community colleges, public technical colleges, the Texas Engineering Extension Service, the Texas A&M Engineering Experiment Station, workforce development boards, and community-based organizations that partner with eligible training providers. Businesses cannot apply directly but must participate as partners in the project. Eligible business partners include private for-profit and nonprofit entities, while public entities are excluded. Trainees must be full-time W-2 employees, and projects must involve active collaboration between applicants and business partners, including formal agreements such as memorandums of understanding. Funding can support the development and delivery of customized training programs, but there are restrictions on allowable costs. Grant funds cannot be used for trainee wages, travel expenses, drug testing, or the purchase of proprietary or production equipment for a single employer. The program targets an average cost of approximately 2400 dollars per trainee, and applicants must justify higher costs if applicable. While there is no mandatory financial contribution required from business partners, in-kind contributions such as wages and benefits during training are considered during evaluation. Applications are accepted on a rolling basis throughout the year, with no fixed deadline. Applicants are encouraged to work closely with regional business liaisons from the Texas Workforce Commission’s Employer Engagement and Community Outreach team to develop proposals. The submission process includes proposal development, submission through the Learner Outcome Tracking System, and ongoing communication with TWC staff. Applicants are notified within approximately ten working days regarding receipt and completeness, and the evaluation process may involve requests for clarification. Each grant typically has a performance period of twelve months, although extensions may be granted in limited circumstances. The evaluation of proposals considers factors such as alignment with workforce needs, participation of small and medium-sized businesses, anticipated wage increases, and overall economic impact. The program also aims to balance funding between training for incumbent workers and training for new job creation, reflecting legislative priorities. As an ongoing, non-recurring rolling program, the Skills Development Fund operates continuously to support workforce development across Texas.

Engage business partners early and ensure training is customized to employer needs Demonstrate wage increases and economic impact Include strong stakeholder collaboration