BILL ANALYSIS H.B. 1031 By: Oliveira (Sibley) Economic Development 05-22-95 Senate Committee Report (Unamended) BACKGROUND In 1989, the Texas Employment Commission (TEC) received statutory authority to file liens on assets owned by employers who have been judged to owe their employees compensation. TEC attempts to enforce the lien and any money collected is given to the employee who brought action against a delinquent employer. The employee already receives the monetary benefit of the lien; the assignment of the lien would give the employee the right to have the lien enforced and would spare the state the costs of enforcement when the amount owed is small. PURPOSE As proposed, H.B. 1031 provides for the collection of certain unpaid wages. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 61E, Labor Code, by adding Section 61.085, as follows: Sec. 61.085. ASSIGNMENT OF LIEN. Authorizes a lien securing wages due under this chapter to be assigned to the claimant, at the claimant's request. SECTION 2. Amends Chapter 61, Labor Code, by adding Subchapter F, as follows: SUBCHAPTER F. DELINQUENCY; LEVY Sec. 61.091. NOTICE OF DELINQUENCY. (a) Authorizes the commission, if under a final order, a person is determined to be delinquent in the payment of wages, penalties, interest, or other amounts (amounts) due under this chapter, to notify personally or by mail any person who: (1) possesses or controls any of the delinquent person's assets, including a credit, bank, or savings account or deposit, or other intangible or personal property; or (2) owes a debt to the delinquent person. (b) Requires a notice under this subchapter to a state officer, department, or agency to be provided before the officer, department, or agency presents to the comptroller the claim of the delinquent person. (c) Authorizes a notice under this subchapter to be given at any time after the amounts due under this chapter become delinquent. Requires the notice to state the amount due and owing and any additional amount that will accrue by operation of law in a period not to exceed 30 days and, in the case of a credit, bank, or savings account or deposit, is effective only up to that amount. Sec. 61.092. DUTIES OF NOTICE RECIPIENT. (a) Provides that on receipt of a notice under this subchapter, the person receiving the notice: (1) shall advise the commission no later than 20 days after the notice is received of each asset belonging to the delinquent person that is possessed or controlled by the person receiving the notice and of each debt owed by the person receiving the notice to the delinquent person; and (2) unless the commission consents to an earlier disposition, may not transfer or dispose of the asset or debt possessed, controlled, or owed by the person on the date the person received the notice within the 60-day period after the date of receipt of the notice. (b) Provides that a notice under this subchapter that attempts to prohibit the transfer or disposition of an asset possessed or controlled by a bank is effective if it is delivered or mailed to the principal office or any branch office of the bank, including any office of the bank at which the deposit is carried or the credit or property is held. (c) Provides that a person who receives a notice under this subchapter and who violates Subsection (a)(2) is liable to the commission for the amount of the indebtedness of the delinquent person with respect to whose obligation the notice was given, to the extent of the value of the affected asset or debt. Sec. 61.093. LEVY. (a) Authorizes the commission, at any time during the 60-day period provided by Section 61.092(a)(2), to levy on the asset or debt by delivery of a notice of levy. (b) Requires the person possessing the asset or debt, on receipt of the levy notice, to transfer the asset to the commission or pay to the commission the amount owed to the delinquent person. Sec. 61.094. NOTICE EFFECT. Provides that a notice delivered under this subchapter is effective: (1) at the time of delivery against all property, rights to property, credits, or debt involving the delinquent person that are not on the date of the notice subject to a preexisting lien, attachment, garnishment, or execution issued through a judicial process; and (2) against all property, rights to property, credits, or debts involving the delinquent person that come into the possession or control of the person served with a notice of levy during the 60-day period provided by Section 61.092(a)(2). Sec. 61.095. DISCHARGE OF LIABILITY. Provides that a person acting in accordance with the terms of the notice issued by the commission under this subchapter is discharged from any obligation or liability to the delinquent person with respect to the affected property, rights to property, credits, and debts of the person affected by compliance with the notice of freeze or levy. SECTION 3. Effective date: September 1, 1995. Makes application of this Act prospective. SECTION 4. Emergency clause.