By: Bosse H.B. No. 747
72S10402 PB-D
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 by H.B. Nos. 550, 784, and 2667, Acts of the 72nd Legislature,
1-9 Regular Session, 1991, is amended to read as follows:
1-10 (5) The term "employment" shall not include:
1-11 (A) Service with respect to which unemployment
1-12 compensation is payable under an Unemployment Compensation System
1-13 established by an Act of Congress; provided that the Commission is
1-14 hereby authorized to enter into agreements with the proper agencies
1-15 under such Act of Congress, which agreements shall become effective
1-16 ten (10) days after publication thereof in the manner provided in
1-17 subsection 11(b) of this Act for general rules, to provide
1-18 reciprocal treatment to individuals who have, after acquiring
1-19 potential rights to benefits under this Act, acquired rights to
1-20 unemployment compensation under such Act of Congress, or who have,
1-21 after acquiring potential rights to unemployment compensation under
1-22 such Act of Congress, acquired rights to benefits under this Act.
1-23 (B) Service performed by an individual as a
1-24 product demonstrator if:
2-1 (i) the service is performed under a
2-2 written contract between the individual and a person whose
2-3 principal business is obtaining the services of demonstrators for
2-4 third parties for product demonstration purposes; and
2-5 (ii) both in contract and in fact the
2-6 individual:
2-7 (I) is not treated as an employee
2-8 with respect to those services for federal unemployment tax
2-9 purposes;
2-10 (II) is compensated for each
2-11 demonstration, or the compensation is based on factors that relate
2-12 to the work performed;
2-13 (III) determines the method of
2-14 performing the service;
2-15 (IV) provides the vehicles used to
2-16 perform the service;
2-17 (V) is responsible for the
2-18 completion of a specific job and is liable for any failure to
2-19 complete the job;
2-20 (VI) is free to accept or reject
2-21 jobs from a product demonstrator business, and the principal
2-22 business has no control over where the individual works;
2-23 (VII) pays all expenses, and the
2-24 opportunity for profit or loss rests solely with the individual;
2-25 and
2-26 (VIII) is responsible for operating
2-27 costs, including fuel, repairs, supplies, and motor vehicle
3-1 insurance;
3-2 (C) Domestic service in a private home, local
3-3 college club, or local chapter of a college fraternity or sorority;
3-4 (D) Service performed by an individual in the
3-5 employ of his son, daughter, or spouse, and service performed by a
3-6 child under the age of twenty-one (21) years in the employ of his
3-7 father or mother;
3-8 (E) Service performed in the employ of a church,
3-9 convention or association of churches, or an organization which is
3-10 operated primarily for religious purposes and which is operated,
3-11 supervised, controlled, or principally supported by a church or
3-12 convention or association of churches;
3-13 (F) Services performed in the employ of a
3-14 political subdivision or any instrumentality thereof which is
3-15 wholly owned by one (1) or more political subdivisions:
3-16 (i) as an elected official;
3-17 (ii) as a member of a legislative body;
3-18 (iii) as a member of the judiciary;
3-19 (iv) as an employee serving on a temporary
3-20 basis in case of fire, storm, snow, earthquake, flood, or similar
3-21 emergency; or
3-22 (v) in a position which, under or pursuant
3-23 to law, is designated as a major nontenured policy-making or
3-24 advisory position, or a policy-making or advisory position the
3-25 performance of the duties of which ordinarily does not require more
3-26 than eight (8) hours per week;
3-27 (G) Service performed in the employ of a foreign
4-1 government (including services as a consular or other officer or
4-2 employee, or a nondiplomatic representative);
4-3 (H) Service performed in the employ of an
4-4 instrumentality wholly owned by a foreign government (i) if the
4-5 service is of a character similar to that performed in foreign
4-6 countries by the employees of the United States Government or of an
4-7 instrumentality thereof; and (ii) if the Commission finds that the
4-8 United States Secretary of State has certified to the United States
4-9 Secretary of the Treasury that the foreign government, with respect
4-10 to whose instrumentality exemption is claimed, grants an equivalent
4-11 exemption with respect to similar services performed in the foreign
4-12 country by employees of the United States Government and of
4-13 instrumentalities thereof;
4-14 (I) Service performed as a student nurse in the
4-15 employ of a hospital or a nurses' training school by an individual
4-16 who is enrolled and is regularly attending classes in a nurses'
4-17 training school chartered or approved pursuant to State law; and
4-18 service performed as an intern in the employ of a hospital by an
4-19 individual who has completed a four-year course in a medical school
4-20 chartered or approved pursuant to State law;
4-21 (J) Service performed by an individual for a
4-22 person as an insurance agent or an insurance solicitor, if all such
4-23 service performed by such individual for such person is performed
4-24 for remuneration solely by way of commission;
4-25 (K) Service performed by an individual under the
4-26 age of eighteen (18) years in the delivery or distribution of
4-27 newspapers or shopping news, not including delivery or distribution
5-1 to any point for subsequent delivery or distribution;
5-2 (L) Service covered by an arrangement between
5-3 the Commission and the agency charged with the administration of
5-4 any other state or federal unemployment compensation law pursuant
5-5 to which all services performed by an individual for an employing
5-6 unit during the period covered by such employing unit's duly
5-7 approved election are deemed to be performed entirely within such
5-8 agency's state or under such federal law;
5-9 (M) Service performed in the employ of the
5-10 United States Government or an instrumentality of the United States
5-11 exempt under the Constitution of the United States from the
5-12 contributions imposed by this Act, except that to the extent that
5-13 the Congress of the United States shall permit states to require
5-14 any instrumentalities of the United States to make payments into an
5-15 unemployment fund under a state unemployment compensation law, all
5-16 of the provisions of this Act shall be applicable to such
5-17 instrumentalities, and to services performed for such
5-18 instrumentalities, in the same manner, to the same extent, and on
5-19 the same terms as to all other employers, employing units,
5-20 individuals, and services; provided, that if this State shall not
5-21 be certified for any year by the Social Security Board or successor
5-22 under Section 1603(c) of the Internal Revenue Code of 1954, the
5-23 payments required by such instrumentalities with respect to such
5-24 year shall be refunded by the Commission from the fund in the same
5-25 manner and within the same period as is provided in subsection
5-26 14(j) of this Act with respect to contributions erroneously
5-27 collected;
6-1 (N) Service performed by a duly ordained,
6-2 commissioned, or licensed minister of a church in the exercise of
6-3 his ministry or by a member of a religious order in the exercise of
6-4 duties required by such order;
6-5 (O) Service performed by a securities
6-6 representative who is compensated for the service exclusively on a
6-7 commission basis;
6-8 (P) Service performed in the employ of a
6-9 facility conducted for the purpose of carrying out a program of
6-10 rehabilitation for individuals whose earning capacity is impaired
6-11 by age or physical or mental deficiency or injury, or providing
6-12 remunerative work for individuals who because of their impaired
6-13 physical or mental capacity cannot be readily absorbed in the
6-14 competitive labor market by an individual receiving such
6-15 rehabilitative or remunerative work;
6-16 (Q) Service performed as part of an unemployment
6-17 work-relief or work-training program assisted or financed in whole
6-18 or in part by any federal agency or an agency of a state or
6-19 political subdivision thereof, by an individual receiving such work
6-20 relief or work training;
6-21 (R) Service performed by an inmate of a
6-22 custodial or penal institution which is owned or operated by the
6-23 State or a political subdivision thereof;
6-24 (S) Service performed in the employ of a school,
6-25 college, or university, if such service is performed by a student
6-26 who is enrolled and is regularly attending classes at such school,
6-27 college, or university;
7-1 (T) Service performed by an individual who is
7-2 enrolled at a nonprofit or public educational institution which
7-3 normally maintains a regular faculty and curriculum and normally
7-4 has a regularly organized body of students in attendance at the
7-5 place where its educational activities are carried on as a student
7-6 in a full-time program, taken for credit at such institution, which
7-7 combines academic instruction with work experience, if such service
7-8 is an integral part of such program, and such institution has so
7-9 certified to the employing unit, except that this subparagraph
7-10 shall not apply to service performed in a program established for
7-11 or on behalf of an employer or group of employers, service
7-12 performed in an apprenticeship training program, or service
7-13 performed by a teaching assistant;
7-14 (U) Service performed in the employ of a
7-15 hospital, if such service is performed by a patient of such
7-16 hospital;
7-17 (V) Service performed on a fishing vessel
7-18 normally having a crew of fewer than ten (10) if the crew member's
7-19 reimbursement for services performed is a share of the catch and
7-20 the services are determined not to be employment under the Federal
7-21 Unemployment Tax Act; and
7-22 (W) Service performed by an individual as a
7-23 direct seller if:
7-24 (i) the individual is engaged in the
7-25 business of in-person sales of consumer products to any buyer on a
7-26 buy-sell basis, a deposit-commission basis, or any similar basis
7-27 for resale in the home, or in a place other than in, or affiliated
8-1 with, a permanent retail establishment, or the individual is
8-2 engaged in the business of selling consumer products in the home or
8-3 in a place other than in, or affiliated with, a permanent retail
8-4 establishment;
8-5 (ii) substantially all the remuneration,
8-6 whether or not paid in cash, for the performance of the services is
8-7 directly related to sales or other output, including the
8-8 performance of services, rather than to the number of hours worked;
8-9 and
8-10 (iii) the services performed by the
8-11 individual are performed under a written contract between the
8-12 individual and the person for whom the services are performed, and
8-13 the contract provides that the individual is not treated as an
8-14 employee with respect to those services for federal tax purposes;
8-15 (X) Service performed by a full-time student in
8-16 the employ of an organized camp if the conditions in (i) below are
8-17 met.
8-18 (i) This paragraph applies if:
8-19 (I) such camp:
8-20 (a) did not operate for more
8-21 than seven (7) months in the calendar year and did not operate for
8-22 more than seven (7) months in the preceding calendar year, or
8-23 (b) had average gross receipts
8-24 for any six (6) months in the preceding calendar year which were
8-25 not more than 33 1/3 percent of its average gross receipts for the
8-26 other six (6) months in the preceding calendar year; and
8-27 (II) such full-time student
9-1 performed services in the employ of such camp for less than
9-2 thirteen (13) calendar weeks in such calendar year.
9-3 (ii) For purposes of this paragraph, an
9-4 individual shall be treated as a full-time student for any period:
9-5 (I) during which the individual is
9-6 enrolled as a full-time student at an educational institution, or
9-7 (II) which is between academic years
9-8 or terms if:
9-9 (a) the individual was
9-10 enrolled as a full-time student at an educational institution for
9-11 the immediately preceding academic year or term, and
9-12 (b) there is a reasonable
9-13 assurance that the individual will be so enrolled for the
9-14 immediately succeeding academic year or term after the period
9-15 described in Subparagraph (a);
9-16 (Y) Service performed by an individual as a real
9-17 estate broker or salesman if:
9-18 (i) the individual is engaged in
9-19 performing acts or transactions comprehended by the definition of
9-20 "real estate broker" in The Real Estate License Act (Article 6573a,
9-21 Vernon's Texas Civil Statutes);
9-22 (ii) the individual is licensed as a real
9-23 estate broker or salesman by the Texas Real Estate Commission;
9-24 (iii) substantially all the remuneration,
9-25 whether or not paid in cash, for the performance of the services is
9-26 directly related to sales or other output, including the
9-27 performance of services, rather than to the number of hours worked;
10-1 and
10-2 (iv) the services performed by the
10-3 individual are performed under a written contract between the
10-4 individual and the person for whom the services are performed, and
10-5 the contract provides that the individual is not treated as an
10-6 employee with respect to those services for federal tax purposes;
10-7 (Z) Service performed by an individual as an
10-8 instructor of persons licensed or seeking licensure as real estate
10-9 brokers or salesmen if:
10-10 (i) the individual is instructing an
10-11 educational program or course approved by the Texas Real Estate
10-12 Commission; and
10-13 (ii) the services performed by the
10-14 individual are performed under a written contract between the
10-15 individual and the person for whom the services are performed, and
10-16 the contract provides that the individual is not treated as an
10-17 employee with respect to those services for federal tax purposes.
10-18 (AA) Service performed for a private for-profit
10-19 delivery or courier service by an individual for compensation if:
10-20 (i) the individual:
10-21 (I) is free to accept or reject jobs
10-22 from a private for-profit delivery or courier service, and the
10-23 private for-profit delivery or courier service has no control over
10-24 when the individual works;
10-25 (II) is compensated for each
10-26 delivery, or the compensation is based on factors that relate to
10-27 the work performed, including receipt of a percentage of any rate
11-1 schedule or of a lawfully published tariff;
11-2 (III) pays all expenses, and the
11-3 opportunity for profit or loss rests solely with the individual;
11-4 (IV) is responsible for operating
11-5 costs, including fuel, repairs, supplies, and motor vehicle
11-6 insurance;
11-7 (V) determines the method of
11-8 performing the service, including selection of routes and order of
11-9 deliveries;
11-10 (VI) is responsible for the
11-11 completion of a specific job and is liable for any failure to
11-12 complete the job;
11-13 (VII) enters into a contract that
11-14 specifies the relationship of the individual to the private
11-15 for-profit delivery or courier service to be that of an independent
11-16 contractor and not that of an employee; and
11-17 (VIII) provides the vehicle used to
11-18 perform the service; and
11-19 (ii) the private for-profit delivery or
11-20 courier service operates exclusively within a commercial zone as
11-21 defined and prescribed by the Railroad Commission of Texas under
11-22 Section 1(g), Chapter 314, Acts of the 41st Legislature, Regular
11-23 Session, 1929 (Article 911b, Vernon's Texas Civil Statutes).
11-24 (BB) Service performed by an individual at a
11-25 trade market for a wholesaler or sales representative of a
11-26 wholesaler or manufacturer of consumer goods under a written
11-27 contract, or as a salesman for a wholesaler or wholesalers of
12-1 consumer goods if such wholesaler or sales representative maintains
12-2 a regular or seasonal place of business at a trade market facility
12-3 in a city with a population of more than 750,000.
12-4 SECTION 2. This Act takes effect December 1, 1991, and
12-5 applies only to benefit eligibility based on a claim for
12-6 unemployment compensation benefits that is filed with the Texas
12-7 Employment Commission on or after that date. A claim filed before
12-8 that date is governed by the law in effect on the date that the
12-9 claim was filed, and the former law is continued in effect for that
12-10 purpose.
12-11 SECTION 3. The importance of this legislation and the
12-12 crowded condition of the calendars in both houses create an
12-13 emergency and an imperative public necessity that the
12-14 constitutional rule requiring bills to be read on three several
12-15 days in each house be suspended, and this rule is hereby suspended.