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 -------------------------------------------------------------------