BILL ANALYSIS
H.B. 1233
By: Moffat (Sibley)
Economic Development
05-22-95
Senate Committee Report (Unamended)
BACKGROUND
Federal legislation, passed as a part of the General Agreement on
Tariffs and Trade (GATT) requires state employment agencies to give
unemployment benefit claimants the option of having federal income
taxes withheld from unemployment benefit payments. Unemployment
benefits have been included in taxable income since 1986. The
federal requirement would allow claimants to elect to have taxes
withheld.
PURPOSE
As proposed, H.B. 1233 authorizes an eligible individual to elect
to have federal income tax withheld from benefits.
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 207, Labor Code, by adding Subchapter F,
as follows:
SUBCHAPTER F. TAX WITHHOLDING
Sec. 207.101. WITHHOLDING FROM BENEFITS FOR FEDERAL INCOME
TAX. (a) Authorizes an eligible individual to elect to have
federal income tax withheld from benefits. Requires the Texas
Employment Commission (commission) to withhold federal income
taxes from the benefits of an individual who elects the
withholding as provided by 26 U.S.C. Section 3301 et seq.
(Federal Unemployment Tax Act) and Section 303, 42 U.S.C.
Section 503 (Social Security Act), as those laws are amended
by P.L. 103-465.
(b) Prohibits the commission from withholding federal income
tax from benefits as provided by this section until January
1, 1997.
SECTION 2. Emergency clause.
Effective date: upon passage.