By Bosse H.B. 747
Substitute the following for H.B. 747:
By Yarbrough C.S.H.B. 747
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the exclusion from coverage under the Texas
1-3 Unemployment Compensation Act of services performed by certain
1-4 securities representatives.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 19(g)(5), Texas Unemployment Compensation
1-7 Act (Article 5221b-17, Vernon's Texas Civil Statutes) as amended,
1-8 is amended to read as follows:
1-9 (5) The term "employment" shall not include:
1-10 (A) Service with respect to which unemployment
1-11 compensation is payable under an Unemployment Compensation System
1-12 established by an Act of Congress; provided that the Commission is
1-13 hereby authorized to enter into agreements with the proper agencies
1-14 under such Act of Congress, which agreements shall become effective
1-15 ten (10) days after publication thereof in the manner provided in
1-16 subsection 11(b) of this Act for general rules, to provide
1-17 reciprocal treatment to individuals who have, after acquiring
1-18 potential rights to benefits under this Act, acquired rights to
1-19 unemployment compensation under such Act of Congress, or who have,
1-20 after acquiring potential rights to unemployment compensation under
1-21 such Act of Congress, acquired rights to benefits under this Act.
1-22 (B) Service performed by an individual as a
1-23 product demonstrator if:
1-24 (i) the service is performed under a
2-1 written contract between the individual and a person whose
2-2 principal business is obtaining the services of demonstrators for
2-3 third parties for product demonstration purposes; and
2-4 (ii) both in contract and in fact the
2-5 individual:
2-6 (I) is not treated as an employee
2-7 with respect to those services for federal unemployment tax
2-8 purposes;
2-9 (II) is compensated for each
2-10 demonstration, or the compensation is based on factors that relate
2-11 to the work performed;
2-12 (III) determines the method of
2-13 performing the service;
2-14 (IV) provides the vehicles used to
2-15 perform the service;
2-16 (V) is responsible for the
2-17 completion of a specific job and is liable for any failure to
2-18 complete the job;
2-19 (VI) is free to accept or reject
2-20 jobs from a product demonstrator business, and the principal
2-21 business has no control over where the individual works;
2-22 (VII) pays all expenses, and the
2-23 opportunity for profit or loss rests solely with the individual;
2-24 and
2-25 (VIII) is responsible for operating
2-26 costs, including fuel, repairs, supplies, and motor vehicle
2-27 insurance;
3-1 (C) Domestic service in a private home, local
3-2 college club, or local chapter of a college fraternity or sorority;
3-3 (D) Service performed by an individual in the
3-4 employ of his son, daughter, or spouse, and service performed by a
3-5 child under the age of twenty-one (21) years in the employ of his
3-6 father or mother;
3-7 (E) Service performed in the employ of a church,
3-8 convention or association of churches, or an organization which is
3-9 operated primarily for religious purposes and which is operated,
3-10 supervised, controlled, or principally supported by a church or
3-11 convention or association of churches;
3-12 (F) Service performed in the employ of a
3-13 political subdivision or any instrumentality thereof which is
3-14 wholly owned by one (1) or more political subdivisions:
3-15 (i) as an elected official;
3-16 (ii) as a member of a legislative body;
3-17 (iii) as a member of the judiciary;
3-18 (iv) as an employee serving on a temporary
3-19 basis in case of fire, storm, snow, earthquake, flood, or similar
3-20 emergency; or
3-21 (v) in a position which, under or pursuant
3-22 to law, is designated as a major nontenured policy-making or
3-23 advisory position, or a policy-making or advisory position the
3-24 performance of the duties of which ordinarily does not require more
3-25 than eight (8) hours per week;
3-26 (G) Service performed in the employ of a foreign
3-27 government (including services as a consular or other officer or
4-1 employee, or a nondiplomatic representative);
4-2 (H) Service performed in the employ of an
4-3 instrumentality wholly owned by a foreign government (i) if the
4-4 service is of a character similar to that performed in foreign
4-5 countries by the employees of the United States Government or of an
4-6 instrumentality thereof; and (ii) if the Commission finds that the
4-7 United States Secretary of State has certified to the United States
4-8 Secretary of the Treasury that the foreign government, with respect
4-9 to whose instrumentality exemption is claimed, grants an equivalent
4-10 exemption with respect to similar services performed in the foreign
4-11 country by employees of the United States Government and of
4-12 instrumentalities thereof;
4-13 (I) Service performed as a student nurse in the
4-14 employ of a hospital or a nurses' training school by an individual
4-15 who is enrolled and is regularly attending classes in a nurses'
4-16 training school chartered or approved pursuant to State law; and
4-17 service performed as an intern in the employ of a hospital by an
4-18 individual who has completed a four-year course in a medical school
4-19 chartered or approved pursuant to State law;
4-20 (J) Service performed by an individual for a
4-21 person as an insurance agent or an insurance solicitor, if all such
4-22 service performed by such individual for such person is performed
4-23 for remuneration solely by way of commission;
4-24 (K) Service performed by an individual under the
4-25 age of eighteen (18) years in the delivery or distribution of
4-26 newspapers or shopping news, not including delivery or distribution
4-27 to any point for subsequent delivery or distribution;
5-1 (L) Service covered by an arrangement between
5-2 the Commission and the agency charged with the administration of
5-3 any other state or federal unemployment compensation law pursuant
5-4 to which all services performed by an individual for an employing
5-5 unit during the period covered by such employing unit's duly
5-6 approved election are deemed to be performed entirely within such
5-7 agency's state or under such federal law;
5-8 (M) Service performed in the employ of the
5-9 United States Government or an instrumentality of the United States
5-10 exempt under the Constitution of the United States from the
5-11 contributions imposed by this Act, except that to the extent that
5-12 the Congress of the United States shall permit states to require
5-13 any instrumentalities of the United States to make payments into an
5-14 unemployment fund under a state unemployment compensation law, all
5-15 of the provisions of this Act shall be applicable to such
5-16 instrumentalities, and to services performed for such
5-17 instrumentalities, in the same manner, to the same extent, and on
5-18 the same terms as to all other employers, employing units,
5-19 individuals, and services; provided, that if this State shall not
5-20 be certified for any year by the Social Security Board or successor
5-21 under Section 1603(c) of the Internal Revenue Code of 1954, the
5-22 payments required by such instrumentalities with respect to such
5-23 year shall be refunded by the Commission from the fund in the same
5-24 manner and within the same period as is provided in subsection
5-25 14(j) of this Act with respect to contributions erroneously
5-26 collected;
5-27 (N) Service performed by a duly ordained,
6-1 commissioned, or licensed minister of a church in the exercise of
6-2 his ministry or by a member of a religious order in the exercise of
6-3 duties required by such order;
6-4 (O) Service performed for a private for profit
6-5 person or entity by an individual as a securities dealer, agent, or
6-6 salesman if:
6-7 (i) the individual is engaged in
6-8 performing an act or transaction subject to the definition of
6-9 "dealer", "agent", or "salesman", in Section 4, The Securities Act
6-10 (Article 581-4, Vernon's Texas Civil Statutes), and its subsequent
6-11 amendments;
6-12 (ii) the individual is registered as a
6-13 securities dealer, agent, or salesman by the Securities
6-14 Commissioner under The Securities Act (Article 581-et seq.,
6-15 Vernon's Texas Civil Statutes), and its subsequent amendments;
6-16 (iii) substantially all the remuneration
6-17 for the performance of the services, whether paid in cash or
6-18 otherwise, is directly related to sales or other output, including
6-19 the performance of services, rather than the number of hours
6-20 worked; and
6-21 (iv) the services performed by the
6-22 individual are performed under a written contract between the
6-23 individual and the person for whom the services are performed, and
6-24 the contract provides that the individual is not treated as an
6-25 employee with respect to those services for federal tax purposes;
6-26 (P) Service performed in the employ of a
6-27 facility conducted for the purpose of carrying out a program of
7-1 rehabilitation for individuals whose earning capacity is impaired
7-2 by age or physical or mental deficiency or injury, or providing
7-3 remunerative work for individuals who because of their impaired
7-4 physical or mental capacity cannot be readily absorbed in the
7-5 competitive labor market by an individual receiving such
7-6 rehabilitative or remunerative work;
7-7 (Q) Service performed as part of an unemployment
7-8 work-relief or work-training program assisted or financed in whole
7-9 or in part by any federal agency or an agency of a state or
7-10 political subdivision thereof, by an individual receiving such work
7-11 relief or work training;
7-12 (R) Service performed by an inmate of a
7-13 custodial or penal institution which is owned or operated by the
7-14 State or a political subdivision thereof;
7-15 (S) Service performed in the employ of a school,
7-16 college, or university, if such service is performed by a student
7-17 who is enrolled and is regularly attending classes at such school,
7-18 college, or university;
7-19 (T) Service performed by an individual who is
7-20 enrolled at a nonprofit or public educational institution which
7-21 normally maintains a regular faculty and curriculum and normally
7-22 has a regularly organized body of students in attendance at the
7-23 place where its educational activities are carried on as a student
7-24 in a full-time program, taken for credit at such institution, which
7-25 combines academic instruction with work experience, if such service
7-26 is an integral part of such program, and such institution has so
7-27 certified to the employing unit, except that this subparagraph
8-1 shall not apply to service performed in a program established for
8-2 or on behalf of an employer or group of employers, service
8-3 performed in an apprenticeship training program, or service
8-4 performed by a teaching assistant;
8-5 (U) Service performed in the employ of a
8-6 hospital, if such service is performed by a patient of such
8-7 hospital;
8-8 (V) Service performed on a fishing vessel
8-9 normally having a crew of fewer than ten (10) if the crew member's
8-10 reimbursement for services performed is a share of the catch and
8-11 the services are determined not to be employment under the Federal
8-12 Unemployment Tax Act; <and>
8-13 (W) Service performed by an individual as a
8-14 direct seller if:
8-15 (i) the individual is engaged in the
8-16 business of in-person sales of consumer products to any buyer on a
8-17 buy-sell basis, a deposit-commission basis, or any similar basis
8-18 for resale in the home, or in a place other than in, or affiliated
8-19 with, a permanent retail establishment, or the individual is
8-20 engaged in the business of selling consumer products in the home or
8-21 in a place other than in, or affiliated with, a permanent retail
8-22 establishment;
8-23 (ii) substantially all the remuneration,
8-24 whether or not paid in cash, for the performance of the services is
8-25 directly related to sales or other output, including the
8-26 performance of services, rather than to the number of hours worked;
8-27 and
9-1 (iii) the services performed by the
9-2 individual are performed under a written contract between the
9-3 individual and the person for whom the services are performed, and
9-4 the contract provides that the individual is not treated as an
9-5 employee with respect to those services for federal tax purposes;
9-6 (X) Service performed by a full-time student in
9-7 the employ of an organized camp if the conditions in (i) below are
9-8 met.
9-9 (i) This paragraph applies if:
9-10 (I) such camp:
9-11 (a) did not operate for more
9-12 than seven (7) months in the calendar year and did not operate for
9-13 more than seven (7) months in the preceding calendar year, or
9-14 (b) had average gross receipts
9-15 for any six (6) months in the preceding calendar year which were
9-16 not more than 33 1/3 percent of its average gross receipts for the
9-17 other six (6) months in the preceding calendar year; and
9-18 (II) such full-time student
9-19 performed services in the employ of such camp for less than
9-20 thirteen (13) calendar weeks in such calendar year.
9-21 (ii) For purposes of this paragraph, an
9-22 individual shall be treated as a full-time student for any period:
9-23 (I) during which the individual is
9-24 enrolled as a full-time student at an educational institution, or
9-25 (II) which is between academic years
9-26 or terms if:
9-27 (a) the individual was
10-1 enrolled as a full-time student at an educational institution for
10-2 the immediately preceding academic year or term, and
10-3 (b) there is a reasonable
10-4 assurance that the individual will be so enrolled for the
10-5 immediately succeeding academic year or term after the period
10-6 described in Subparagraph (a);
10-7 (Y) Service performed by an individual as a real
10-8 estate broker or salesman if:
10-9 (i) the individual is engaged in
10-10 performing acts or transactions comprehended by the definition of
10-11 "real estate broker" in The Real Estate License Act (Article 6573a,
10-12 Vernon's Texas Civil Statutes);
10-13 (ii) the individual is licensed as a real
10-14 estate broker or salesman by the Texas Real Estate Commission;
10-15 (iii) substantially all the remuneration,
10-16 whether or not paid in cash, for the performance of the services is
10-17 directly related to sales or other output, including the
10-18 performance of services, rather than to the number of hours worked;
10-19 and
10-20 (iv) the services performed by the
10-21 individual are performed under a written contract between the
10-22 individual and the person for whom the services are performed, and
10-23 the contract provides that the individual is not treated as an
10-24 employee with respect to those services for federal tax purposes;
10-25 (Z) Service performed by an individual as an
10-26 instructor of persons licensed or seeking licensure as real estate
10-27 brokers or salesmen if:
11-1 (i) the individual is instructing an
11-2 educational program or course approved by the Texas Real Estate
11-3 Commission; and
11-4 (ii) the services performed by the
11-5 individual are performed under a written contract between the
11-6 individual and the person for whom the services are performed, and
11-7 the contract provides that the individual is not treated as an
11-8 employee with respect to those services for federal tax purposes;
11-9 <and>
11-10 (AA) Service preformed for a private for-profit
11-11 delivery or courier service by an individual for compensation if:
11-12 (i) the individual:
11-13 (I) is free to accept or reject jobs
11-14 from a private for-profit delivery or courier service, and the
11-15 private for-profit delivery or courier service has no control over
11-16 when the individual works;
11-17 (II) is compensated for each
11-18 delivery, or the compensation is based on factors that relate to
11-19 the work performed, including receipt of a percentage of any rate
11-20 schedule or of a lawfully published tariff;
11-21 (III) pays all expenses, and the
11-22 opportunity for profit or loss rests solely with the individual;
11-23 (IV) is responsible for operating
11-24 costs, including fuel, repairs, supplies, and motor vehicle
11-25 insurance;
11-26 (V) determines the method of
11-27 performing the service, including selection of routes and order of
12-1 deliveries;
12-2 (VI) is responsible for the
12-3 completion of a specific job and is liable for any failure to
12-4 complete the job;
12-5 (VII) enters into a contract that
12-6 specifies the relationship of the individual to the private
12-7 for-profit delivery or courier service to be that of an independent
12-8 contractor and not that of an employee; and
12-9 (VIII) provides the vehicle used to
12-10 perform the service; and
12-11 (ii) the private for-profit delivery or
12-12 courier service operates exclusively within a commercial zone as
12-13 defined and prescribed by the Railroad Commission of Texas under
12-14 Section 1(g), Chapter 314, Acts of the 41st Legislature, Regular
12-15 Session, 1929 (Article 911b, Vernon's Texas Civil Statutes);
12-16 (BB) Service performed by an individual at a
12-17 trade market for a wholesaler or sales representative of a
12-18 wholesaler or manufacturer of consumer goods under a written
12-19 contract, or as a salesman for a wholesaler or wholesalers of
12-20 consumer goods if such wholesaler or sales representative maintains
12-21 a regular or seasonal place of business at a trade market facility
12-22 in a city with a population of more than 750,000.
12-23 SECTION 2. This Act takes effect October 1, 1993.
12-24 SECTION 3. EMERGENCY. The importance of this legislation
12-25 and the crowded condition of the calendars in both houses create an
12-26 emergency and an imperative public necessity that the
12-27 constitutional rule requiring bills to be read on three several
13-1 days in each house be suspended, and this rule is hereby suspended.