1-1  By:  Tallas (Senate Sponsor - Brown)                   H.B. No. 520
    1-2        (In the Senate - Received from the House April 22, 1993;
    1-3  April 26, 1993, read first time and referred to Committee on
    1-4  Economic Development; May 21, 1993, reported favorably by the
    1-5  following vote:  Yeas 9, Nays 0; May 21, 1993, sent to printer.)
    1-6                            COMMITTEE VOTE
    1-7                          Yea     Nay      PNV      Absent 
    1-8        Parker             x                               
    1-9        Lucio              x                               
   1-10        Ellis              x                               
   1-11        Haley              x                               
   1-12        Harris of Dallas                               x   
   1-13        Harris of Tarrant  x                               
   1-14        Leedom             x                               
   1-15        Madla              x                               
   1-16        Rosson             x                               
   1-17        Shapiro            x                               
   1-18        Wentworth                                      x   
   1-19                         A BILL TO BE ENTITLED
   1-20                                AN ACT
   1-21  relating to the exclusion from coverage under the Texas
   1-22  Unemployment Compensation Act of services performed by certain
   1-23  landmen.
   1-24        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
   1-25        SECTION 1.  Section 19(g)(5), Texas Unemployment Compensation
   1-26  Act (Article 5221b-17, Vernon's Texas Civil Statutes), is amended
   1-27  to read as follows:
   1-28              (5)  The term "employment" shall not include:
   1-29                    (A)  Service with respect to which unemployment
   1-30  compensation is payable under an Unemployment Compensation System
   1-31  established by an Act of Congress; provided that the Commission is
   1-32  hereby authorized to enter into agreements with the proper agencies
   1-33  under such Act of Congress, which agreements shall become effective
   1-34  ten (10) days after publication thereof in the manner provided in
   1-35  subsection 11(b) of this Act for general rules, to provide
   1-36  reciprocal treatment to individuals who have, after acquiring
   1-37  potential rights to benefits under this Act, acquired rights to
   1-38  unemployment compensation under such Act of Congress, or who have,
   1-39  after acquiring potential rights to unemployment compensation under
   1-40  such Act of Congress, acquired rights to benefits under this Act;
   1-41                    (B)  Service performed by an individual as a
   1-42  product demonstrator if:
   1-43                          (i)  the service is performed under a
   1-44  written contract between the individual and a person whose
   1-45  principal business is obtaining the services of demonstrators for
   1-46  third parties for product demonstration purposes; and
   1-47                          (ii)  both in contract and in fact the
   1-48  individual:
   1-49                                (I)  is not treated as an employee
   1-50  with respect to those services for federal unemployment tax
   1-51  purposes;
   1-52                                (II)  is compensated for each
   1-53  demonstration, or the compensation is based on factors that relate
   1-54  to the work performed;
   1-55                                (III)  determines the method of
   1-56  performing the service;
   1-57                                (IV)  provides the vehicles used to
   1-58  perform the service;
   1-59                                (V)  is responsible for the
   1-60  completion of a specific job and is liable for any failure to
   1-61  complete the job;
   1-62                                (VI)  is free to accept or reject
   1-63  jobs from a product demonstrator business, and the principal
   1-64  business has no control over where the individual works;
   1-65                                (VII)  pays all expenses, and the
   1-66  opportunity for profit or loss rests solely with the individual;
   1-67  and
   1-68                                (VIII)  is responsible for operating
    2-1  costs, including fuel, repairs, supplies, and motor vehicle
    2-2  insurance;
    2-3                    (C)  Domestic service in a private home, local
    2-4  college club, or local chapter of a college fraternity or sorority;
    2-5                    (D)  Service performed by an individual in the
    2-6  employ of his son, daughter, or spouse, and service performed by a
    2-7  child under the age of twenty-one (21) years in the employ of his
    2-8  father or mother;
    2-9                    (E)  Service performed in the employ of a church,
   2-10  convention or association of churches, or an organization which is
   2-11  operated primarily for religious purposes and which is operated,
   2-12  supervised, controlled, or principally supported by a church or
   2-13  convention or association of churches;
   2-14                    (F)  Services performed in the employ of a
   2-15  political subdivision or any instrumentality thereof which is
   2-16  wholly owned by one (1) or more political subdivisions:
   2-17                          (i)  as an elected official;
   2-18                          (ii)  as a member of a legislative body;
   2-19                          (iii)  as a member of the judiciary;
   2-20                          (iv)  as an employee serving on a temporary
   2-21  basis in case of fire, storm, snow, earthquake, flood, or similar
   2-22  emergency; or
   2-23                          (v)  in a position which, under or pursuant
   2-24  to law, is designated as a major nontenured policy-making or
   2-25  advisory position, or a policy-making or advisory position the
   2-26  performance of the duties of which ordinarily does not require more
   2-27  than eight (8) hours per week;
   2-28                    (G)  Service performed in the employ of a foreign
   2-29  government (including services as a consular or other officer or
   2-30  employee, or a nondiplomatic representative);
   2-31                    (H)  Service performed in the employ of an
   2-32  instrumentality wholly owned by a foreign government (i) if the
   2-33  service is of a character similar to that performed in foreign
   2-34  countries by the employees of the United States Government or of an
   2-35  instrumentality thereof; and (ii) if the Commission finds that the
   2-36  United States Secretary of State has certified to the United States
   2-37  Secretary of the Treasury that the foreign government, with respect
   2-38  to whose instrumentality exemption is claimed, grants an equivalent
   2-39  exemption with respect to similar services performed in the foreign
   2-40  country by employees of the United States Government and of
   2-41  instrumentalities thereof;
   2-42                    (I)  Service performed as a student nurse in the
   2-43  employ of a hospital or a nurses' training school by an individual
   2-44  who is enrolled and is regularly attending classes in a nurses'
   2-45  training school chartered or approved pursuant to State law; and
   2-46  service performed as an intern in the employ of a hospital by an
   2-47  individual who has completed a four-year course in a medical school
   2-48  chartered or approved pursuant to State law;
   2-49                    (J)  Service performed by an individual for a
   2-50  person as an insurance agent or an insurance solicitor, if all such
   2-51  service performed by such individual for such person is performed
   2-52  for remuneration solely by way of commission;
   2-53                    (K)  Service performed by an individual under the
   2-54  age of eighteen (18) years in the delivery or distribution of
   2-55  newspapers or shopping news, not including delivery or distribution
   2-56  to any point for subsequent delivery or distribution;
   2-57                    (L)  Service covered by an arrangement between
   2-58  the Commission and the agency charged with the administration of
   2-59  any other state or federal unemployment compensation law pursuant
   2-60  to which all services performed by an individual for an employing
   2-61  unit during the period covered by such employing unit's duly
   2-62  approved election are deemed to be performed entirely within such
   2-63  agency's state or under such federal law;
   2-64                    (M)  Service performed in the employ of the
   2-65  United States Government or an instrumentality of the United States
   2-66  exempt under the Constitution of the United States from the
   2-67  contributions imposed by this Act, except that to the extent that
   2-68  the Congress of the United States shall permit states to require
   2-69  any instrumentalities of the United States to make payments into an
   2-70  unemployment fund under a state unemployment compensation law, all
    3-1  of the provisions of this Act shall be applicable to such
    3-2  instrumentalities, and to services performed for such
    3-3  instrumentalities, in the same manner, to the same extent, and on
    3-4  the same terms as to all other employers, employing units,
    3-5  individuals, and services; provided, that if this State shall not
    3-6  be certified for any year by the Social Security Board or successor
    3-7  under Section 1603(c) of the Internal Revenue Code of 1954, the
    3-8  payments required by such instrumentalities with respect to such
    3-9  year shall be refunded by the Commission from the fund in the same
   3-10  manner and within the same period as is provided in subsection
   3-11  14(j) of this Act with respect to contributions erroneously
   3-12  collected;
   3-13                    (N)  Service performed by a duly ordained,
   3-14  commissioned, or licensed minister of a church in the exercise of
   3-15  his ministry or by a member of a religious order in the exercise of
   3-16  duties required by such order;
   3-17                    (P)  Service performed in the employ of a
   3-18  facility conducted for the purpose of carrying out a program of
   3-19  rehabilitation for individuals whose earning capacity is impaired
   3-20  by age or physical or mental deficiency or injury, or providing
   3-21  remunerative work for individuals who because of their impaired
   3-22  physical or mental capacity cannot be readily absorbed in the
   3-23  competitive labor market by an individual receiving such
   3-24  rehabilitative or remunerative work;
   3-25                    (Q)  Service performed as part of an unemployment
   3-26  work-relief or work-training program assisted or financed in whole
   3-27  or in part by any federal agency or an agency of a state or
   3-28  political subdivision thereof, by an individual receiving such work
   3-29  relief or work training;
   3-30                    (R)  Service performed by an inmate of a
   3-31  custodial or penal institution which is owned or operated by the
   3-32  State or a political subdivision thereof;
   3-33                    (S)  Service performed in the employ of a school,
   3-34  college, or university, if such service is performed by a student
   3-35  who is enrolled and is regularly attending classes at such school,
   3-36  college, or university;
   3-37                    (T)  Service performed by an individual who is
   3-38  enrolled at a nonprofit or public educational institution which
   3-39  normally maintains a regular faculty and curriculum and normally
   3-40  has a regularly organized body of students in attendance at the
   3-41  place where its educational activities are carried on as a student
   3-42  in a full-time program, taken for credit at such institution, which
   3-43  combines academic instruction with work experience, if such service
   3-44  is an integral part of such program, and such institution has so
   3-45  certified to the employing unit, except that this subparagraph
   3-46  shall not apply to service performed in a program established for
   3-47  or on behalf of an employer or group of employers, service
   3-48  performed in an apprenticeship training program, or service
   3-49  performed by a teaching assistant;
   3-50                    (U)  Service performed in the employ of a
   3-51  hospital, if such service is performed by a patient of such
   3-52  hospital;
   3-53                    (V)  Service performed on a fishing vessel
   3-54  normally having a crew of fewer than ten (10) if the crew member's
   3-55  reimbursement for services performed is a share of the catch and
   3-56  the services are determined not to be employment under the Federal
   3-57  Unemployment Tax Act; and
   3-58                    (W)  Service performed by an individual as a
   3-59  direct seller if:
   3-60                          (i)  the individual is engaged in the
   3-61  business of in-person sales of consumer products to any buyer on a
   3-62  buy-sell basis, a deposit-commission basis, or any similar basis
   3-63  for resale in the home, or in a place other than in, or affiliated
   3-64  with, a permanent retail establishment, or the individual is
   3-65  engaged in the business of selling consumer products in the home or
   3-66  in a place other than in, or affiliated with, a permanent retail
   3-67  establishment;
   3-68                          (ii)  substantially all the remuneration,
   3-69  whether or not paid in cash, for the performance of the services is
   3-70  directly related to sales or other output, including the
    4-1  performance of services, rather than to the number of hours worked;
    4-2  and
    4-3                          (iii)  the services performed by the
    4-4  individual are performed under a written contract between the
    4-5  individual and the person for whom the services are performed, and
    4-6  the contract provides that the individual is not treated as an
    4-7  employee with respect to those services for federal tax purposes;
    4-8                    (X)  Service performed by a full-time student in
    4-9  the employ of an organized camp if the conditions in (i) below are
   4-10  met.
   4-11                          (i)  This paragraph applies if:
   4-12                                (I)  such camp:
   4-13                                      (a)  did not operate for more
   4-14  than seven (7) months in the calendar year and did not operate for
   4-15  more than seven (7) months in the preceding calendar year, or
   4-16                                      (b)  had average gross receipts
   4-17  for any six (6) months in the preceding calendar year which were
   4-18  not more than 33 1/3 percent of its average gross receipts for the
   4-19  other six (6) months in the preceding calendar year; and
   4-20                                (II)  such full-time student
   4-21  performed services in the employ of such camp for less than
   4-22  thirteen (13) calendar weeks in such calendar year.
   4-23                          (ii)  For purposes of this paragraph, an
   4-24  individual shall be treated as a full-time student for any period:
   4-25                                (I)  during which the individual is
   4-26  enrolled as a full-time student at an educational institution, or
   4-27                                (II)  which is between academic years
   4-28  or terms if:
   4-29                                      (a)  the individual was
   4-30  enrolled as a full-time student at an educational institution for
   4-31  the immediately preceding academic year or term, and
   4-32                                      (b)  there is a reasonable
   4-33  assurance that the individual will be so enrolled for the
   4-34  immediately succeeding academic year or term after the period
   4-35  described in Subparagraph (a);
   4-36                    (Y)  Service performed by an individual as a real
   4-37  estate broker or salesman if:
   4-38                          (i)  the individual is engaged in
   4-39  performing acts or transactions comprehended by the definition of
   4-40  "real estate broker" in The Real Estate License Act (Article 6573a,
   4-41  Vernon's Texas Civil Statutes);
   4-42                          (ii)  the individual is licensed as a real
   4-43  estate broker or salesman by the Texas Real Estate Commission;
   4-44                          (iii)  substantially all the remuneration,
   4-45  whether or not paid in cash, for the performance of the services is
   4-46  directly related to sales or other output, including the
   4-47  performance of services, rather than to the number of hours worked;
   4-48  and
   4-49                          (iv)  the services performed by the
   4-50  individual are performed under a written contract between the
   4-51  individual and the person for whom the services are performed, and
   4-52  the contract provides that the individual is not treated as an
   4-53  employee with respect to those services for federal tax purposes;
   4-54                    (Z)  Service performed by an individual as an
   4-55  instructor of persons licensed or seeking licensure as real estate
   4-56  brokers or salesmen if:
   4-57                          (i)  the individual is instructing an
   4-58  educational program or course approved by the Texas Real Estate
   4-59  Commission; and
   4-60                          (ii)  the services performed by the
   4-61  individual are performed under a written contract between the
   4-62  individual and the person for whom the services are performed, and
   4-63  the contract provides that the individual is not treated as an
   4-64  employee with respect to those services for federal tax purposes;
   4-65  and
   4-66                    (AA)  Service performed for a private for-profit
   4-67  delivery or courier service by an individual for compensation if:
   4-68                          (i)  the individual:
   4-69                                (I)  is free to accept or reject jobs
   4-70  from a private for-profit delivery or courier service, and the
    5-1  private for-profit delivery or courier service has no control over
    5-2  when the individual works;
    5-3                                (II)  is compensated for each
    5-4  delivery, or the compensation is based on factors that relate to
    5-5  the work performed, including receipt of a percentage of any rate
    5-6  schedule or of a lawfully published tariff;
    5-7                                (III)  pays all expenses, and the
    5-8  opportunity for profit or loss rests solely with the individual;
    5-9                                (IV)  is responsible for operating
   5-10  costs, including fuel, repairs, supplies, and motor vehicle
   5-11  insurance;
   5-12                                (V)  determines the method of
   5-13  performing the service, including selection of routes and order of
   5-14  deliveries;
   5-15                                (VI)  is responsible for the
   5-16  completion of a specific job and is liable for any failure to
   5-17  complete the job;
   5-18                                (VII)  enters into a contract that
   5-19  specifies the relationship of the individual to the private
   5-20  for-profit delivery or courier service to be that of an independent
   5-21  contractor and not that of an employee; and
   5-22                                (VIII)  provides the vehicle used to
   5-23  perform the service; and
   5-24                          (ii)  the private for-profit delivery or
   5-25  courier service operates exclusively within a commercial zone as
   5-26  defined and prescribed by the Railroad Commission of Texas under
   5-27  Section 1(g), Chapter 314, Acts of the 41st Legislature, Regular
   5-28  Session, 1929 (Article 911b, Vernon's Texas Civil Statutes).
   5-29                    (BB)  Service performed by an individual at a
   5-30  trade market for a wholesaler or sales representative of a
   5-31  wholesaler or manufacturer of consumer goods under a written
   5-32  contract, or as a salesman for a wholesaler or wholesalers of
   5-33  consumer goods if such wholesaler or sales representative maintains
   5-34  a regular or seasonal place of business at a trade market facility
   5-35  in a city with a population of more than 750,000.
   5-36                    (CC)  Service performed for a private for-profit
   5-37  person or entity by an individual as a landman if:
   5-38                          (i)  the individual is engaged primarily in
   5-39  negotiating for the acquisition or divestiture of mineral rights or
   5-40  negotiating business agreements that provide for the exploration
   5-41  for or development of minerals;
   5-42                          (ii)  substantially all remuneration, paid
   5-43  in cash or otherwise, for the performance of the services is
   5-44  directly related to the completion by the individual of the
   5-45  specific tasks contracted for rather than to the number of hours
   5-46  worked by the individual; and
   5-47                          (iii)  the services performed by the
   5-48  individual are performed under a written contract between the
   5-49  individual and the person for whom the services are performed that
   5-50  provides that the individual is to be treated as an independent
   5-51  contractor and not as an employee with respect to the services
   5-52  provided under the contract.
   5-53        SECTION 2.  This Act takes effect September 1, 1993, and
   5-54  applies only to benefit eligibility based on a claim for
   5-55  unemployment compensation benefits that is filed with the Texas
   5-56  Employment Commission on or after that date.  A claim filed before
   5-57  that date is governed by the law in effect on the date the claim
   5-58  was filed, and the former law is continued in effect for that
   5-59  purpose.
   5-60        SECTION 3.  The importance of this legislation and the
   5-61  crowded condition of the calendars in both houses create an
   5-62  emergency   and   an   imperative   public   necessity   that   the
   5-63  constitutional rule requiring bills to be read on three several
   5-64  days in each house be suspended, and this rule is hereby suspended.
   5-65                               * * * * *
   5-66                                                         Austin,
   5-67  Texas
   5-68                                                         May 21, 1993
   5-69  Hon. Bob Bullock
   5-70  President of the Senate
    6-1  Sir:
    6-2  We, your Committee on Economic Development to which was referred
    6-3  H.B. No. 520, have had the same under consideration, and I am
    6-4  instructed to report it back to the Senate with the recommendation
    6-5  that it do pass and be printed.
    6-6                                                         Parker,
    6-7  Chairman
    6-8                               * * * * *
    6-9                               WITNESSES
   6-10                                                  FOR   AGAINST  ON
   6-11  ___________________________________________________________________
   6-12  Name:  John C. Jennings                                        x
   6-13  Representing:  TX Employment Commission
   6-14  City:  Austin
   6-15  -------------------------------------------------------------------
   6-16  Name:  Amy L. Gilliland                          x
   6-17  Representing:  TX Ind. Producers & Royalty
   6-18  City:  Austin
   6-19  -------------------------------------------------------------------
   6-20  Name:  Charles B. Milliken                       x
   6-21  Representing:  Amer. Assn. of Prof. Landsmen
   6-22  City:  Fort Worth
   6-23  -------------------------------------------------------------------
   6-24  Name:  Jack Deeter                               x
   6-25  Representing:  Amer. Assn. of Prof. Landmen
   6-26  City:  Fort Worth
   6-27  -------------------------------------------------------------------
   6-28  Name:  Robert L. Truair                          x
   6-29  Representing:  Amer. Assn. of Prof. Landmen
   6-30  City:  San Antonio
   6-31  -------------------------------------------------------------------
   6-32  Name:  Roger Soape                               x
   6-33  Representing:  Amer. Assn. of Prof. Landmen
   6-34  City:  Houston
   6-35  -------------------------------------------------------------------
   6-36  Name:  Jerry K. Bramwell                         x
   6-37  Representing:  Phillips Petroleum Co.
   6-38  City:  Missouri City, TX
   6-39  -------------------------------------------------------------------
   6-40  Name:  Alan H. Morgan                            x
   6-41  Representing:  Amer. Assn. of Prof. Landmen
   6-42  City:  Sugarland
   6-43  -------------------------------------------------------------------